Wicker & Cochran Successfully Add GO Zone Benefits to Tax Package

Press Release

Date: Dec. 10, 2010
Location: Washington, DC

Gulf Coast Closer to Receiving Extended Tax Incentives to Rebuild Hurricane-damaged Areas

U.S. Senators Roger Wicker (R-Miss.) and Thad Cochran (R-Miss.) today reported that their request to extend two important Gulf Opportunity Zone (GO Zone) provisions has been accepted and included in the Senate's year-end tax extension package.

Wicker and Cochran sought to have GO Zone bonds and bonus depreciation added to the Senate tax extenders measure, which also included extensions of the GO Zone historic rehabilitation tax credit and low income housing tax credit. The Senate is scheduled to consider the tax extenders legislation on Monday.

"Although much progress has been made, the Gulf Coast continues to rebuild from a devastating hurricane, the oil spill, and a slow economy," said Wicker. "The GO Zone bond and bonus depreciation provisions are proven incentives that help attract private investment in Mississippi and create jobs."

"The GO Zone benefits have been useful in attracting capital to rebuild devastated areas. Five years after Hurricanes Katrina and Rita, the need for these benefits remains," Cochran said. "I am grateful that our request to extend the life of these rebuilding tools has been added to the larger tax extension package."

"Mississippi has come a long way since Hurricane Katrina, but the recession has hampered our continuing recovery efforts," Gov. Haley Barbour said. "We need the extension of the GO Zone provisions to create the jobs that will rebuild the Mississippi Gulf Coast stronger and better than before."

The GO Zone bond language is similar to an amendment authored by Wicker and cosponsored by Cochran that the Senate adopted earlier this year. The bond provision would give Mississippi, Louisiana and Alabama until Jan. 1, 2012 to allocate tax-exempt GO Zone bonds previously issued by Congress following Hurricanes Katrina and Rita. The GO Zone bonds have been an essential tool in economic development efforts across Mississippi by financing the acquisition, construction and renovation of commercial real estate property. Without an extension of this Go Zone provision, the remaining bonds expire at the end of this year.

At the Senators' request, the Senate tax package also includes another provision to extend the GO Zone bonus depreciation tax incentive through Dec. 31, 2011. This extension mirrors Wicker-Cochran legislation (S. 2761) introduced last November. The GO Zone bonus depreciation deduction has been utilized by investors and developers in projects across the Gulf Coast, playing an integral role in economic development. The incentive is available to projects of all sizes, from manufacturing plants, hotels and office buildings to retail stores and apartment complexes.

Bonus depreciation tax benefits in the GO Zone expired on Dec. 31, 2009. The extension pushed by Wicker and Cochran would be retroactive in 2010 to include all costs incurred through 2011 for projects placed in service by the end of 2011.

The tax package also extends the GO Zone low income housing tax credit to Jan. 1, 2012 and the GO Zone historic tax credit to Dec. 31, 2011.