December 8, 2005: NORTON HOMEBUYER TAX CREDIT AND BUSINESS TAX INCENTIVES NOW PASSED BY BOTH HOUSES
FOR IMMEDIATE RELEASE
December 8, 2005
NORTON HOMEBUYER TAX CREDIT AND BUSINESS TAX INCENTIVES
NOW PASSED BY BOTH HOUSES
Washington, DC--Congresswoman Eleanor Holmes Norton (D-DC) said that D.C. homebuyers can breath a sigh of relief because the House today passed a one year extension of her D.C.-only $5,000 Homebuyer Tax Credit and business tax incentives as part of a national package of tax cuts. The Senate approved the Norton tax breaks on November 18, prior to Thanksgiving recess. With the prospect that some credits in the national package would be dropped this year, Norton waged a year-long fight to keep the D.C. credits, with the success achieved today. The D.C.-only credits, which Norton first won in 1997, were scheduled to expire on December 31 of this year, but will be extended through the end of 2006.
The Congresswoman said that prospective homebuyers who were hesitant to purchase and businesses that had put projects on hold now will be able to move forward. Inquiries about the homebuyer tax credit have been the subject of numerous calls to Norton’s offices. Callers were advised to continue with home purchases and business expansion because Norton was working with colleagues in both houses of Congress at the same time and believed that she could get the credits through. Residents and businesses will see the benefits as they fill out tax forms for 2005 or 2006.
Norton said that her only regret was that the 20 non-controversial tax incentives, including D.C.’s, were taken up as part of the Tax Reconciliation bill, which is controversial because the bill extends capital gains and dividend tax breaks for an additional two years, adding $81 billion to the deficit. The Democrats offered a substitute to strike this extension, but left the group of tax incentives that included the Norton package.
The Norton homebuyer tax refund is credited with stabilizing the city’s population and stemming the near-catastrophic taxpayer flight of recent decades. A study showed that the largest group using the credit are D.C. renters who decide to buy here. The D.C. business tax incentives have assisted scores of small and larger businesses, as well. Employers located within the D.C. Enterprise Zone may get many attractive tax incentives, including tax exempt bonds for facilities and equipment and federal income tax credits for wages paid to employees who are D.C. residents. Norton said the wage credit has kept many businesses in D.C. that might otherwise have left. Thousands of jobs have been created as the credits became a magnet for both attracting employers and for hiring D.C. residents.
The Congresswoman said issues unrelated to the D.C. tax credits may delay final passage or conference approval. If so, Norton expects Congress to give approval early next year and make the incentives retroactive for all of 2005. The credits were similarly extended at the end of 2003, and made retroactive, when they were bogged down in other tax issues.