Senate Majority Leader Harry Reid (D-NV) and Finance Committee Chairman Max Baucus (D-MT) unveiled a substitute unemployment benefits bill late last week that includes an extension and expansion of the first-time home buyer tax credit and net operating loss (NOL) relief, as sought by NLBMDA. The $8,000 first-time home buyer tax credit will be extended for purchases through April 30, 2010, with an additional 60 days to close. The income caps will be raised to $125,000 single/$225,000 joint filers. A new, $6,500 tax credit will be available for existing home owners who have lived in their current home for at least 5 years. Both credits will be limited to homes priced below $800,000.

Net operating loss (NOL) carry back was included in the stimulus bill earlier this year to extend the carry back from two years to five for businesses with revenues under $15 million. Under the Reid/Baucus bill, that relief will be available for all companies in tax years 2008 or 2009, though companies can only take a credit against 50 percent of income in year 5. Small businesses with gross receipts of less than $5 million could carry back NOLs for both 2008 and 2009 and are exempt from the fifth-year 50-percent limit. The Senate will vote on cloture to proceed to the Reid/Baucus substitute at 5pm this evening; a vote on final passage could come shortly thereafter. The House has indicated they will take up the bill passed by the Senate, without amendment, in order to speed its delivery to the President.

Thanks to all NLBMDA members who've sent numerous e-mails and placed phone calls to legislators over the past several months in support of these important measures to restore the housing industry. Vote results will be posted on www.BuildtheVote.org as soon as they are available so that dealers may thank their legislators who vote in support.

Click on this link to view the complete NLBMDA Update for November 2, 2009.