Norton's DC Tax Credits Pass the House Giving Residents and Businesses an Economic Lift (5/21/08)

Washington, D.C. î º Congresswoman Eleanor Holmes Norton's (D-DC) struggle during near recession conditions to renew her D.C. homebuyer and business tax credits was successful today with their inclusion in the Renewable Energy and Job Creation Act of 2008. Norton spoke with her friend, Ways and Means Committee Chairman Charles Rangel (D-NY), who personally saw to it that these D.C.-only credits were in his tax extenders package, and told him that she deeply appreciated his efforts. The tax breaks are retroactive for all of 2008 and effective through December 31, 2008. "Our tax credits, which I first got in the worst of times during the 1990s, are tailor-made to help residents and businesses in a downturn that so far has refused to turn up. This city is in a different place today, but we have been boosted by a good economy. These credits will give D.C. a chance to maintain the stability it has earned. This is the time for Congress to step up, not to stand down and withdraw the important role the credits have played in the city's amazing recovery."

Norton said that she is encouraged that homebuyers, who face tougher mortgage and credit conditions and costs and have been hesitant to purchase, and businesses that have put projects on hold, may feel that they can go forward. Administration witnesses at a Senate hearing this year questioned the continuing need for the D.C. credits, ironically citing their good results, but the Congresswoman said that the success of these incentives argued for their continuation rather than cutting them before the job is done. Former D.C. Control Board chair Alice Rivlin and other experts say D.C. must retain residents and then add 100,000 more for long term stability following the financial collapse of the city in the 1990s. The business incentives are particularly important to retain and attract a permanent small business tax base because the District has no state source of revenue and competes poorly with the business conditions and tax structures in nearby states.

Inquiries from residents about the homebuyer tax credit have been the subject of steady calls to Norton's offices since they expired last year. Callers were advised to continue with home purchases and business expansion because Norton was working with colleagues to renew the credits, as she has been able to do since their enactment, and they have always been retroactive in the past. As usual, the credits have been bogged down by inaction with tax provisions unrelated to D.C.'s credits. Residents and businesses will qualify for the benefits, some for two years, as they prepare tax forms next year for 2008.

The popular homebuyer tax refund, which is available citywide, is credited with stabilizing the city's population by stemming D.C.'s decades of taxpayer flight that finally assumed near-catastrophic proportions and brought the city to its proverbial knees. The D.C. business tax incentives have assisted hundreds of small and large businesses in the District's neighborhoods and downtown. Businesses will receive attractive tax incentives, including tax exempt bonds for facilities and equipment and a federal tax credit for the first $15,000 ($3,000) of salary paid to every employee who is a D.C. resident. "The wage credit is my favorite business credit," Norton said, "because D.C. is a virtual job machine, but the jobs go to the far larger pool of applicants in the region. The suburban job base is so huge that it overwhelms our small numbers, and our residents can't help but lose out. This credit levels the playing field and has given employers an incentive to look closely at D.C. residents. The wage credit helps the city make up for the denial of commuter tax authority here and therefore does double duty - boosting the employment of residents while keeping businesses here." The credit applies to all D.C. employees, whether new or already employed. The bill has passed the House and is heading to conference.

Residents interested in the homebuyer credit can call Norton's office at (202) 225-8050 or go to www.norton.house.gov for general information or contact the Internal Revenue Service at 1-800-tax-form or www.irs.gov. Information about the business tax credits is available at the D.C. Office of Planning and Economic Development at (202) 727-6365 or www.dc.gov.