SubChapter S Bank Bill Introduced in the House
HR 2339 was introduced by Representative Kenny Marchant on May 4, 2017 in the 115th Congress. The bill would permit Subchapter S Banks and their holding companies to have 500 shareholders and to issue preferred stock. The bill is identical to HR 2789 introduced by Rep. Marchant in the 114th Congress with the exception of minor changes recommended by the Joint Committee on Taxation. Those changes limit make the number of preferred shareholders subject to the 500 shareholder limit and limit preferred shareholders to shareholders who could otherwise own Subchapter S stock. In addition, a technical wording change was made to coordinate the size of the S corp’s deduction for dividends paid on preferred stock with the gains taxable to preferred holders.
Congressman Marchant has asked that the industry encourage their representatives to co-sponsor the bill with him to evidence broad support.
He also asks that the industry secure the commitment of Chairman Brady to include the provisions in the original tax reform bill being drafted and anticipated to be introduced in July 2017.
We invite every bank to request their Congressional representatives to sign on as co-sponsors of the bill, whether you are an S corp bank o a C corp bank.