Senators Orrin Hatch and Blanche Lincoln have introduced legislation that would allow state-chartered banks operating as LLCs to be taxed as an LLC by the IRS. Currently, banks organized as LLCs are taxed as a corporation by the IRS.
Many states, including Iowa, allow banks to be organized as LLCs. These states allow LLC banks to be taxed as a partnership, avoiding the double taxation for corporations.
Both the American Bankers Association and the Independent Community Bankers of America support the bill.
A copy of the bill can be found here.
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