To amend the Internal Revenue Code of 1986 to increase the deduction for meal and entertainment expenses of small businesses.

Amends the Internal Revenue Code to allow small businesses (corporations, or S corporations, partnerships, or sole proprietorships meeting C corporation requirements) an increased deduction for meal and entertainment expenses.

Waives the current limitation of such deduction to 50 percent of such expenses. Applies to small businesses the applicable percentage currently restricted to certain individuals subject to the hours of service limitations of the Department of Transportation, which ranges from 55 percent for taxable years beginning in 1998 or 1999 up to 80 percent for taxable years beginning in 2008 or thereafter.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1555 Introduced in House (IH)]



107th CONGRESS
  1st Session
                                H. R. 1555

 To amend the Internal Revenue Code of 1986 to increase the deduction 
        for meal and entertainment expenses of small businesses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 24, 2001

  Mr. Foley (for himself, Mr. Tanner, and Mr. McCrery) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to increase the deduction 
        for meal and entertainment expenses of small businesses.

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

SECTION 1. SMALL BUSINESSES ALLOWED INCREASED DEDUCTION FOR MEAL AND 
              ENTERTAINMENT EXPENSES.

    (a) In General.--Subsection (n) of section 274 of the Internal 
Revenue Code of 1986 (relating to only 50 percent of meal and 
entertainment expenses allowed as deduction) is amended by adding at 
the end the following new paragraph:
            ``(4) Special rule for small businesses.--
                    ``(A) In general.--In the case of any taxpayer 
                which is a small business, paragraph (1) shall be 
                applied by substituting `the applicable percentage (as 
                defined in paragraph (3)(B))' for `50 percent'.
                    ``(B) Small business.--For purposes of this 
                paragraph, the term `small business' means, with 
                respect to expenses paid or incurred during any taxable 
                year--
                            ``(i) any C corporation which meets the 
                        requirements of section 55(e)(1) for such year, 
                        and
                            ``(ii) any S corporation, partnership, or 
                        sole proprietorship which would meet such 
                        requirements if it were a C corporation.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2001.
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