Go Zone News
GO Zone Bill Clears House
May 27, 2008
WASHINGTON – On May 21, the House of Representatives passed a measure, 260 to 160, to eliminate a legal technicality that affected hurricane recovery in Mississippi and Louisiana. H.R. 6049, the Renewable Energy and Job Creation Act of 2008, contains a provision to allow grant recipients who deducted their loss after Hurricanes Katrina and Rita to amend previous tax returns to ensure that the grants monies will not be considered taxable income.
The GO Zone Act allows a bonus depreciation tax deduction for property placed in service before December 31, 2010; however, in 2006 when Congress extended the deadline for the completion of construction projects, it did not extend the December 31, 2007 deadline to begin construction. Consequently, only projects that broke ground by the end of 2007 are eligible for the bonus tax deduction. The bill eliminates the deadline to begin construction to qualify.
The bill will allow grant recipients who previously deducted their loss after the 2005 hurricanes from their taxes the ability to amend previous returns. By law, a grant recipient who did not deduct their loss cannot have their grant taxed as income.
The Senate's version of this bill, the Alternative Minimum Tax and Extenders Tax Relief Act of 2008, has been referred to the Senate Committee on Finance. The Senate previously approved both recovery measures as part of its version of the Foreclosure Prevention Act of 2008, but the Senate and House have yet to reach an agreement on the bill.