[StBernard] Senate Sends to President Housing Bill with Landrieu Road Home Tax Fix

[Westley Annis]

Senate Sends to President Housing Bill with Landrieu Road Home Tax Fix
Bill includes $1.3 billion in tax relief for the Gulf Coast.

 

WASHINGTON - he United States Senate today sent to the President's desk a
housing bill that includes a provision authored by Sen. Mary L. Landrieu,
D-La., to provide $1.3 billion in tax relief to Gulf Coast homeowners and
businesses recovering from the 2005 hurricanes. The Senate voted 72-to-13 to
send the bill to President Bush, who said earlier this week he will not veto
the bill. Sen. David Vitter, R-La., was one of only 13 senators to vote
against the bill.

"The Senate today sent to the President a bill with one of the most
significant provisions to jumpstarting our recovery since Katrina and Rita
devastated the Gulf Coast in 2005," Sen. Landrieu said. "The IRS ruled it
could tax Road Home grants for homeowners in Louisiana and Mississippi.
After 18 months of work since I first introduced a 'Road Home Tax' fix bill,
Congress is now eliminating that onerous and unintended tax. Our homeowners
will now get the tax relief they need to reinvest in their homes and our
communities."

The "Road Home Tax" relief would apply to homeowners who took a casualty
loss deduction on their 2005 federal tax returns to account for damage to
their homes following Hurricanes Katrina and Rita. These homeowners were
subsequently required by the Internal Revenue Service (IRS) to pay income
tax on their rebuilding grants.

Sen. Landrieu and Rep. Charlie Melancon, D-La., yesterday sent a letter to
the IRS, urging the agency to expedite guidance in response to the bill so
that homeowners can amend their tax returns as soon as possible.

"It is incredibly important that the residents of the Gulf Coast take
advantage of this relief as quickly as possible," the members wrote to IRS
Commissioner Douglas Shulman. "We therefore request that the IRS expedite
the publication of any guidance or notices to ensure that the IRS'
Washington, D.C., office and the IRS' field offices are providing consistent
advice.

"By expediting any guidance, we can ensure that the people of the Gulf Coast
have the financial certainty that they need to grapple with this tax."

The housing bill also includes a Sen. Landrieu provision benefitting Gulf
Coast businesses. It removes the deadline under which they are required to
begin construction of new ventures in hurricane-affected areas in order to
benefit from Gulf Opportunity Zone (GO Zone) bonus depreciation tax
benefits. Currently, only projects that began before December 31, 2007 are
eligible for the tax relief. Under the Landrieu plan, no commencement
deadline would exist.

"This provision promotes business investment along the Gulf Coast by
allowing businesses to begin new construction on commercial properties and
rental housing and still take advantage of the bonus depreciation tax
break," Sen. Landrieu said.

The housing package is intended to help relieve the housing crisis and
broadens the Federal Housing Administration's programs to back refinanced
loans. The bill also includes about $95 million in Community Development
Block Grant funding for Louisiana.

A full copy of Sen. Landrieu's letter to the IRS is available here:
http://landrieu.senate.gov/news/08.07.25_Letter_to_IRS.pdf
<http://landrieu-press.enews.senate.gov/mail/util.cfm?mailaction=clickthru&g
piv=1999886506.1526.312&gen=1&mailing_linkid=2208> 

 

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