WASHINGTON, DC – November 10, 2009 – (RealEstateRama) — A key tax incentive designed to spur rebuilding efforts in the areas hardest hit by Hurricane Katrina would be extended for two years by legislation introduced today by U.S. Senators Roger Wicker and Thad Cochran.
The Mississippi lawmakers are seeking a two-year extension of the Gulf Opportunity Zone (GO Zone) bonus depreciation tax incentive, which has been integral in attracting investment to the Gulf Coast. Under the Wicker-authored legislation, the bonus depreciation provision would be extended through Dec. 31, 2011. In addition to Cochran, U.S. Senators Mary Landrieu and David Vitter of Louisiana are original cosponsors of the measure.
Passed in the aftermath of Hurricane Katrina, the GO Zone Act of 2005 created a tax incentive equal to 50 percent of the cost of qualified property for the taxable year in which it was placed in service. Current bonus depreciation tax benefits in the GO Zone expire Dec. 31.
“The bonus depreciation incentive has had a substantial impact on Gulf Coast rebuilding by helping fuel private investment in commercial and affordable housing construction,” said Wicker. “Problems with flood maps and other infrastructure delays have prohibited many projects from being able to take advantage of the bonus depreciation incentive. In order for this provision to have the full economic impact Congress initially intended, it must be extended for another two years.”
“Our state has made impressive progress in rebuilding following Hurricane Katrina, but more needs to be done. A two-year extension of the GO Zone tax incentive is necessary to the continuance of our progress,” Cochran said.
“There is no doubt that an extension of the bonus depreciation provision is necessary to meet its original purpose of spurring investment and rebuilding in the Gulf Coast region. We are grateful to Senators Wicker and Cochran for championing this provision, which remains one of the most important tools crafted by Congress in wake of Hurricane Katrina,” added Brian Sanderson of the Gulf Coast Business Council.
The new Senate legislation would extend the bonus depreciation incentive in the areas of Mississippi and Louisiana hardest hit by Katrina, including: Hancock, Harrison, Jackson, Pearl River, and Stone counties in Mississippi; and Calcasieu, Cameron, Orleans, Plaquemines, St. Bernard, St. Tammany, and Washington parishes in Louisiana.
The GO Zone’s bonus depreciation deduction has been utilized by investors and developers in projects across the Gulf Coast. The incentive is available to projects of all sizes, from manufacturing plants, hotels, and office buildings to retail stores and apartment complexes.
In addition to their push to extend the bonus depreciation incentive, Wicker and Cochran have also recently cosponsored two other bills to extend GO Zone tax credits for low-income housing and historic rehabilitation projects. Those bills, S.1761 and S.1861, were introduced by U.S. Senator Mary Landrieu of Louisiana