Senate assembles tax breaks for Gulf Coast businesses
WASHINGTON – Senate tax-writers embraced the casinos, golf courses and liquor stores that House lawmakers excluded from roughly $7 billion in tax incentives to rebuild Gulf Coast businesses damaged or destroyed by hurricanes.The Senate could act as soon as Thursday on a package of tax breaks and other assistance that fulfills President Bush’s call for a special business zone in the Gulf Coast. Lawmakers hurried to finish the bill before taking a holiday break.The House last week passed its own package of aid worth $7 billion for businesses hurt by Hurricane Katrina. Its key benefits matched the Senate and included increased write-offs for small business investments and an additional write-offs for other businesses purchasing equipment and new property.House and Senate versions of the bill both aim to rehabilitate damaged buildings, defray the cost of cleanup and demolition and aid small timber companies. Both let individuals hit by hurricanes Rita and Wilma claim some of the same assistance already extended to those hurt by Hurricane Katrina.”The tax incentives are aimed at helping to rebuild the local and regional economy so that individuals and families can go home and rebuild their lives,” said Senate Finance Committee Chairman Charles Grassley, R-Iowa.The House, however, denied tax benefits to a list of businesses – country clubs, casinos, hot tub facilities, liquor stores, massage parlors, golf courses, racetracks and tanning parlors.At least two Republican senators, Rick Santorum of Pennsylvania and Sam Brownback of Kansas, prefer the path taken by the House to withhold federal assistance for those businesses.Rep. Frank Wolf, R-Va., led the movement to carve some leisure industries out of the tax benefits offered to the Gulf Coast, arguing that lawmakers would have a difficult time explaining the decision to subsidize gambling with taxpayers’ dollars.In some cases, the Senate would offer broader benefits than the House. Senate tax-writers would expand a tax credit for businesses that keep employees on the payroll while shut down due to storm damage. Students attending college in the region would see their education tax credits double.The Senate did not agree with a House decision, opposed by the Treasury Department, to issue new bond authority to Louisiana, Mississippi and Alabama with a 50 percent federal government guarantee.Some other unfinished business hitched a ride on the bill, likely to be the last tax legislation that Congress passes this year. One such item would let soldiers use their combat pay for purposes of claiming the earned income tax credit, a benefit designed to pull low-income workers out of poverty.