A bill to amend the Internal Revenue code of 1986 to expand income averaging to small agriculture-related businesses.

Amends the Internal Revenue Code to allow the averaging of farming income for individuals engaged in the qualified business of servicing or selling agricultural products, including fertilizers, seeds, and equipment. Defines a qualified business as one which: (1) receives at least 75 percent of its gross receipts from a farming business; and (2) employed no more than 100 full- time employees during the preceding taxable year.

Terminates such allowance after December 31, 2002.

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1860 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1860

 To amend the Internal Revenue Code of 1986 to expand income averaging 
                to small agriculture-related businesses.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 4, 1999

   Mr. Grams introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to expand income averaging 
                to small agriculture-related businesses.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. INCOME AVERAGING FOR SMALL AGRICULTURE-RELATED BUSINESSES.

    (a) In General.--Section 1301(b)(3) of the Internal Revenue Code of 
1986 (defining farming business) is amended to read as follows:
            ``(3) Farming business.--
                    ``(A) In general.--The term `farming business' 
                means the trade or business of--
                            ``(i) farming (within the meaning of 
                        section 263A(e)(4)), or
                            ``(ii) selling or servicing agricultural 
                        products.
                    ``(B) Agricultural products.--For purposes of this 
                subsection, the term `agricultural products' includes 
                fertilizers, seeds, agricultural equipment, and other 
                products sold for use in a farming business (as defined 
                in subparagraph (A)(i)).''
    (b) Definition of Qualified Business.--Section 1301(b) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following:
            ``(4) Qualified business.--The term `qualified business' 
        means a person--
                    ``(A) for which not less than 75 percent of the 
                gross receipts for the taxable year are attributable to 
                a farming business (as defined in paragraph (3)(A)(ii)) 
                (or, in the case of a sole proprietorship, which would 
                have such gross receipts if such proprietorship were a 
                corporation), and
                    ``(B) which employed not more than 100 full-time 
                employees during the preceding taxable year.
        For purposes of subparagraph (A), rules similar to the rules of 
        paragraphs (2) and (3) (without regard to subparagraph (A) 
        thereof) of section 448(c) shall apply.''
    (c) Termination.--Section 1301 of the Internal Revenue Code of 1986 
is amended by adding at the end the following:
    ``(d) Termination.--In the case of a qualified business, this 
section shall not apply to taxable years beginning after December 31, 
2002.''
    (d) Conforming Amendment.--Section 1301(a) of the Internal Revenue 
Code of 1986 is amended by inserting ``(or of a qualified business in 
the case of a farming business described in subsection (b)(3)(A)(ii))'' 
after ``farming business''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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