[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 236 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 236
To amend the Internal Revenue Code of 1986 to expand the expense
treatment for small businesses and to reduce the depreciation recovery
period for restaurant buildings and franchise operations, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 1, 2001
Mr. Hutchinson 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 the expense
treatment for small businesses and to reduce the depreciation recovery
period for restaurant buildings and franchise operations, 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; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Small Business Tax
Fairness Act of 2001''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
SEC. 2. EXPANSION OF EXPENSE TREATMENT FOR SMALL BUSINESSES.
(a) In General.--Section 179(b)(1) is amended to read as follows:
``(1) Dollar limitation.--
``(A) In general.--The aggregate cost which may be
taken into account under subsection (a) for any taxable
year shall not exceed $100,000.
``(B) Inflation adjustment.--In the case of any
taxable year beginning in a calendar year after 2001,
the dollar amount contained in subparagraph (A) shall
be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) 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 2000' for
`calendar year 1992' in subparagraph (B)
thereof.
If any amount as adjusted under this subparagraph is
not a multiple of $1,000, such amount shall be rounded
to the nearest multiple of $1,000.''.
(b) Expansion of Phase-Out of Limitation.--Section 179(b)(2) is
amended to read as follows:
``(2) Reduction in limitation.--
``(A) In general.--The limitation under paragraph
(1) for any taxable year shall be reduced (but not
below zero) by the amount by which the cost of section
179 property for which a deduction is allowable
(without regard to this subsection) under subsection
(a) for such taxable year exceeds $400,000.''
``(B) Inflation adjustment.--In the case of any
taxable year beginning in a calendar year after 2001,
the dollar amount contained in subparagraph (A) shall
be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) 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 2000' for
`calendar year 1992' in subparagraph (B)
thereof.
If any amount as adjusted under this subparagraph is
not a multiple of $10,000, such amount shall be rounded
to the nearest multiple of $10,000.''.
(c) Time of Deduction.--The second sentence of section 179(a)
(relating to election to expense certain depreciable business assets)
is amended by inserting ``(or, if the taxpayer elects, the preceding
taxable year if the property was purchased in such preceding year)''
after ``service''.
(d) Computer Software Eligible for Expensing.--
(1) In general.--The heading and first sentence of section
179(d)(1) 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)) 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.''.
(2) No computer software included as section 197
intangible.--
(A) In general.--Section 197(e)(3)(A) is amended to
read as follows:
``(A) In general.--Any computer software.''.
(B) Conforming amendment.--Section 167(f)(1)(B) is
amended by striking ``; except that such term shall not
include any such software which is an amortizable
section 197 intangible''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 3. DEPRECIATION RECOVERY PERIOD FOR RESTAURANT BUILDINGS AND
FRANCHISE OPERATIONS.
(a) 15-Year Recovery Period.--Section 168(e)(3)(E) (relating to 15-
year property) is amended by striking ``and'' at the end of clause
(ii), by striking the period at the end of clause (iii) and inserting a
comma, and by adding at the end the following new clauses:
``(iv) any section 1250 property which is a
retail restaurant facility or an improvement
thereto, and
``(v) any section 1250 property which is a
franchise operation subject to section 1253.''.
(b) Retail Restaurant Facility.--Section 168(e) (relating to
classification of property) is amended by adding at the end the
following new paragraph:
``(6) Retail restaurant facility.--The term `retail
restaurant facility' means any building if--
``(A) more than 50 percent of the building's square
footage is devoted to preparation of, and seating for
on-premises consumption of, prepared meals, and
``(B) the building is owned by--
``(i) the person operating the meal
preparation facility in such building, or
``(ii) a person who is related (within the
meaning of section 267(b) or 707(b)(1)) to the
person described in clause (i).''
(c) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (E)(iii) the following new items:
``(E)(iv)................................................... 15
``(E)(v).................................................... 15''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act and to all improvements made after the date of enactment.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Sponsor introductory remarks on measure. (CR S1216)
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