Small Business Expensing Improvement Act of 2002

Small Business Expensing Improvement Act of 2002 - Amends the Internal Revenue Code with respect to the expensing of depreciable business assets (section 179) to: (1) increase the maximum amount which may be expensed to $40,000 (eliminating the current phase-in of annual increases) and the phase-out threshold to $325,000; and (2) make certain computer software and property used for lodging eligible for section 179 expensing.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4470 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 4470

 To amend the Internal Revenue Code of 1986 to expand the depreciation 
    benefits available to small businesses, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 17, 2002

   Mr. Herger (for himself, Mr. Tanner, Mr. Portman, Mr. Foley, Mrs. 
   Johnson of Connecticut, Mr. Weller, Mr. Collins, Mr. McInnis, Mr. 
    Crane, Mr. Houghton, and Mr. Lewis of Kentucky) 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 expand the depreciation 
    benefits available to small businesses, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Expensing Improvement 
Act of 2002''.

SEC. 2. MODIFICATIONS TO EXPENSING UNDER SECTION 179.

    (a) Increase of Amount Which May Be Expensed.--
            (1) In general.--Paragraph (1) of section 179(b) of the 
        Internal Revenue Code of 1986 (relating to dollar limitation) 
        is amended to read as follows:
            ``(1) Dollar limitation.--The aggregate cost which may be 
        taken into account under subsection (a) for any taxable year 
        shall not exceed $40,000.''
            (2) Increase in phaseout threshold.--Paragraph (2) of 
        section 179(b) of such Code is amended by striking ``$200,000'' 
        and inserting ``$325,000''.
            (3) Inflation adjustment of dollar amounts.--Subsection (b) 
        of section 179 of such Code is amended by adding at the end the 
        following new paragraph:
            ``(5) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2002, each dollar 
        amount contained in paragraph (1) or (2) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins by substituting `calendar year 
                2001' for `calendar year 1992' in subparagraph (B) 
                thereof.
        If any amount, as adjusted under the preceding sentence, is not 
        a multiple of $1,000 ($10,000 in the case of the dollar amount 
        contained in paragraph (2)), such amount shall be rounded to 
        the nearest multiple of $1,000 or $10,000, as the case may 
        be.''
    (b) Certain Computer Software Eligible for Expensing.--The heading 
and first sentence of paragraph (1) of section 179(d) of such Code 
(relating to section 179 property) are amended to read as follows:
            ``(1) Section 179 property.--For purposes of this section, 
        the term `section 179 property' means property--
                    ``(A) which is--
                            ``(i) tangible property (to which section 
                        168 applies), or
                            ``(ii) computer software (as defined in 
                        section 197(e)(3)(B)) which is described in 
                        section 197(e)(3)(A)(i) and to which section 
                        167 applies,
                    ``(B) which is section 1245 property (as defined in 
                section 1245(a)(3)), and
                    ``(C) which is acquired by purchase for use in the 
                active conduct of a trade or business.''.
    (c) Property Used for Lodging Eligible for Expensing.--The second 
sentence of section 179(d)(1) of such Code is amended by striking 
``property described in section 50(b)'' and inserting ``property 
described in paragraph (1), (3), or (4) of section 50(b)''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to property placed 
        in service after December 31, 2001.
            (2) Exception.--The amendments made by subsection (a) shall 
        apply to property placed in service in taxable years beginning 
        after December 31, 2001.
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