Amends the Internal Revenue Code to make permanent the additional 50% depreciation allowance (bonus depreciation) for qualified property placed in service after December 31, 2013. Modifies the definition of "qualified property" to include qualified retail improvement property. Increases by $8,000 (with an annual inflation adjustment after 2014) the maximum allowable depreciation deduction for a passenger automobile (i.e., any 4-wheeled vehicle which is manufactured primarily for use on public streets, roads, and highways and is rated at 6,000 pounds unloaded gross vehicle weight or less).
Makes permanent, for taxable years ending after December 31, 2013, the election to increase the alternative minimum tax (AMT) credit limitation in lieu of bonus depreciation.
Allows an additional deprecation allowance for a tree or vine bearing fruits or nuts, in the taxable year in which the tree or vine is planted, or grafted to a plant, in the ordinary course of the taxpayer's farming business. Makes such provision applicable to trees and vines planted or grafted after December 31, 2013.
Prohibits the entry of the budgetary effects of this Act on any PAYGO (pay-as-you-go) scorecard.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4718 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4718
To amend the Internal Revenue Code of 1986 to modify and make permanent
bonus depreciation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 22, 2014
Mr. Tiberi (for himself, Mr. Schock, Mr. Young of Indiana, Mr. Reed,
Mr. Paulsen, Mr. Griffin of Arkansas, Mr. Nunes, Mr. Kelly of
Pennsylvania, Mr. Brady of Texas, Ms. Jenkins, Mr. Boustany, Mr.
Marchant, Mrs. Black, Mr. Buchanan, Mr. Renacci, Mr. Gerlach, Mr.
Reichert, Mr. Huizenga of Michigan, and Mr. Roskam) 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 modify and make permanent
bonus depreciation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. BONUS DEPRECIATION MODIFIED AND MADE PERMANENT.
(a) Made Permanent; Inclusion of Qualified Retail Improvement
Property.--Section 168(k)(2) of the Internal Revenue Code of 1986 is
amended to read as follows:
``(2) Qualified property.--For purposes of this
subsection--
``(A) In general.--The term `qualified property'
means property--
``(i)(I) to which this section applies
which has a recovery period of 20 years or
less,
``(II) which is computer software
(as defined in section 167(f)(1)(B))
for which a deduction is allowable
under section 167(a) without regard to
this subsection,
``(III) which is water utility
property,
``(IV) which is qualified leasehold
improvement property, or
``(V) which is qualified retail
improvement property, and
``(ii) the original use of which commences
with the taxpayer.
``(B) Exception for alternative depreciation
property.--The term `qualified property' shall not
include any property to which the alternative
depreciation system under subsection (g) applies,
determined--
``(i) without regard to paragraph (7) of
subsection (g) (relating to election to have
system apply), and
``(ii) after application of section 280F(b)
(relating to listed property with limited
business use).
``(C) Special rules.--
``(i) Sale-leasebacks.--For purposes of
clause (ii) and subparagraph (A)(ii), if
property is--
``(I) originally placed in service
by a person, and
``(II) sold and leased back by such
person within 3 months after the date
such property was originally placed in
service,
such property shall be treated as originally
placed in service not earlier than the date on
which such property is used under the leaseback
referred to in subclause (II).
``(ii) Syndication.--For purposes of
subparagraph (A)(ii), if--
``(I) property is originally placed
in service by the lessor of such
property,
``(II) such property is sold by
such lessor or any subsequent purchaser
within 3 months after the date such
property was originally placed in
service (or, in the case of multiple
units of property subject to the same
lease, within 3 months after the date
the final unit is placed in service, so
long as the period between the time the
first unit is placed in service and the
time the last unit is placed in service
does not exceed 12 months), and
``(III) the user of such property
after the last sale during such 3-month
period remains the same as when such
property was originally placed in
service,
such property shall be treated as originally
placed in service not earlier than the date of
such last sale.
``(D) Coordination with section 280f.--For purposes
of section 280F:
``(i) Automobiles.--In the case of a
passenger automobile (as defined in section
280F(d)(5)) which is qualified property, the
Secretary shall increase the limitation under
section 280F(a)(1)(A)(i) by $8,000.
``(ii) Listed property.--The deduction
allowable under paragraph (1) shall be taken
into account in computing any recapture amount
under section 280F(b)(2).
``(iii) Inflation adjustment.--In the case
of any taxable year beginning in a calendar
year after 2014, the $8,000 amount in clause
(i) shall be increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the automobile price
inflation adjustment determined under
section 280F(d)(7)(B)(i) for the
calendar year in which such taxable
year begins by substituting `2013' for
`1987' in subclause (II) thereof.
If any increase under the preceding sentence is
not a multiple of $100, such increase shall be
rounded to the nearest multiple of $100.
``(E) Deduction allowed in computing minimum tax.--
For purposes of determining alternative minimum taxable
income under section 55, the deduction under section
167 for qualified property shall be determined without
regard to any adjustment under section 56.''.
(b) Expansion of Election To Accelerate AMT Credits in Lieu of
Bonus Depreciation.--Section 168(k)(4) of such Code is amended to read
as follows:
``(4) Election to accelerate amt credits in lieu of bonus
depreciation.--
``(A) In general.--If a corporation elects to have
this paragraph apply for any taxable year--
``(i) paragraphs (1)(A), (2)(D)(i), and
(5)(A)(i) shall not apply for such taxable
year,
``(ii) the applicable depreciation method
used under this section with respect to any
qualified property shall be the straight line
method, and
``(iii) the limitation imposed by section
53(c) for such taxable year shall be increased
by the bonus depreciation amount which is
determined for such taxable year under
subparagraph (B).
``(B) Bonus depreciation amount.--For purposes of
this paragraph--
``(i) In general.--The bonus depreciation
amount for any taxable year is an amount equal
to 20 percent of the excess (if any) of--
``(I) the aggregate amount of
depreciation which would be allowed
under this section for qualified
property placed in service by the
taxpayer during such taxable year if
paragraph (1) applied to all such
property, over
``(II) the aggregate amount of
depreciation which would be allowed
under this section for qualified
property placed in service by the
taxpayer during such taxable year if
paragraph (1) did not apply to any such
property.
The aggregate amounts determined under
subclauses (I) and (II) shall be determined
without regard to any election made under
subsection (b)(2)(D), (b)(3)(D), or (g)(7) and
without regard to subparagraph (A)(ii).
``(ii) Limitation.--The bonus depreciation
amount for any taxable year shall not exceed
the lesser of--
``(I) 50 percent of the minimum tax
credit under section 53(b) for the
first taxable year ending after
December 31, 2013, or
``(II) the minimum tax credit under
section 53(b) for such taxable year
determined by taking into account only
the adjusted minimum tax for taxable
years ending before January 1, 2014
(determined by treating credits as
allowed on a first-in, first-out
basis).
``(iii) Aggregation rule.--All corporations
which are treated as a single employer under
section 52(a) shall be treated--
``(I) as 1 taxpayer for purposes of
this paragraph, and
``(II) as having elected the
application of this paragraph if any
such corporation so elects.
``(C) Credit refundable.--For purposes of section
6401(b), the aggregate increase in the credits
allowable under part IV of subchapter A for any taxable
year resulting from the application of this paragraph
shall be treated as allowed under subpart C of such
part (and not any other subpart).
``(D) Other rules.--
``(i) Election.--Any election under this
paragraph may be revoked only with the consent
of the Secretary.
``(ii) Partnerships with electing
partners.--In the case of a corporation which
is a partner in a partnership and which makes
an election under subparagraph (A) for the
taxable year, for purposes of determining such
corporation's distributive share of partnership
items under section 702 for such taxable year--
``(I) paragraphs (1)(A), (2)(D)(i),
and (5)(A)(i) shall not apply, and
``(II) the applicable depreciation
method used under this section with
respect to any qualified property shall
be the straight line method.
``(iii) Certain partnerships.--In the case
of a partnership in which more than 50 percent
of the capital and profits interests are owned
(directly or indirectly) at all times during
the taxable year by 1 corporation (or by
corporations treated as 1 taxpayer under
subparagraph (B)(iii)), each partner shall
compute its bonus depreciation amount under
clause (i) of subparagraph (B) by taking into
account its distributive share of the amounts
determined by the partnership under subclauses
(I) and (II) of such clause for the taxable
year of the partnership ending with or within
the taxable year of the partner.''.
(c) Special Rules for Trees and Vines Bearing Fruits and Nuts.--
Section 168(k) of such Code is amended--
(1) by striking paragraph (5), and
(2) by inserting after paragraph (4) the following new
paragraph:
``(5) Special rules for trees and vines bearing fruits and
nuts.--
``(A) In general.--In the case of any tree or vine
bearing fruits or nuts which is planted, or is grafted
to a plant that has already been planted, by the
taxpayer in the ordinary course of the taxpayer's
farming business (as defined in section 263A(e)(4))--
``(i) a depreciation deduction equal to 50
percent of the adjusted basis of such tree or
vine shall be allowed under section 167(a) for
the taxable year in which such tree or vine is
so planted or grafted, and
``(ii) the adjusted basis of such tree or
vine shall be reduced by the amount of such
deduction.
``(B) Election out.--If a taxpayer makes an
election under this subparagraph for any taxable year,
this paragraph shall not apply to any tree or vine
planted or grafted during such taxable year. An
election under this subparagraph may be revoked only
with the consent of the Secretary.
``(C) Additional depreciation may be claimed only
once.--If this paragraph applies to any tree or vine,
such tree or vine shall not be treated as qualified
property in the taxable year in which placed in
service.
``(D) Coordination with election to accelerate amt
credits.--If a corporation makes an election under
paragraph (4) for any taxable year, the amount under
paragraph (4)(B)(i)(I) for such taxable year shall be
increased by the amount determined under subparagraph
(A)(i) for such taxable year.
``(E) Deduction allowed in computing minimum tax.--
Rules similar to the rules of paragraph (2)(E) shall
apply for purposes of this paragraph.''.
(d) Conforming Amendments.--
(1) Section 168(e)(8) of such Code is amended by striking
subparagraph (D).
(2) Section 168(k) of such Code is amended by adding at the
end the following new paragraph:
``(6) Election out.--If a taxpayer makes an election under
this paragraph with respect to any class of property for any
taxable year, this subsection shall not apply to all property
in such class placed in service (or, in the case of paragraph
(5), planted or grafted) during such taxable year. An election
under this paragraph may be revoked only with the consent of
the Secretary.''.
(3) Section 168(l)(5) of such Code is amended by striking
``section 168(k)(2)(G)'' and inserting ``section
168(k)(2)(E)''.
(4) Section 263A(c) of such Code is amended by adding at
the end the following new paragraph:
``(7) Coordination with section 168(k)(5).--This section
shall not apply to any amount allowable as a deduction by
reason of section 168(k)(5) (relating to special rules for
trees and vines bearing fruits and nuts).''.
(5) Section 460(c)(6)(B) of such Code is amended by
striking ``which--'' and all that follows and inserting ``which
has a recovery period of 7 years or less.''.
(6) Section 168(k) of such Code is amended by striking
``Acquired After December 31, 2007, and Before January 1,
2014'' in the heading thereof.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this subsection shall apply
to property placed in service after December 31, 2013.
(2) Expansion of election to accelerate amt credits in lieu
of bonus depreciation.--
(A) In general.--The amendment made by subsection
(b) (other than so much of such amendment as relates to
section 168(k)(4)(D)(iii) of such Code, as added by
such amendment) shall apply to taxable years ending
after December 31, 2013.
(B) Transitional rule.--In the case of a taxable
year beginning before January 1, 2014, and ending after
December 31, 2013, the bonus depreciation amount
determined under section 168(k)(4) of such Code for
such year shall be the sum of--
(i) such amount determined without regard
to the amendments made by this section and--
(I) by taking into account only
property placed in service before
January 1, 2014, and
(II) by multiplying the limitation
under section 168(k)(4)(C)(ii) of such
Code (determined without regard to the
amendments made by this section) by a
fraction the numerator of which is the
number of days in the taxable year
before January 1, 2014, and the
denominator of which is the number of
days in the taxable year, and
(ii) such amount determined after taking
into account the amendments made by this
section and--
(I) by taking into account only
property placed in service after
December 31, 2013, and
(II) by multiplying the limitation
under section 168(k)(4)(B)(ii) of such
Code (as amended by this section) by a
fraction the numerator of which is the
number of days in the taxable year
after December 31, 2013, and the
denominator of which is the number of
days in the taxable year.
(3) Special rules for certain trees and vines.--The
amendment made by subsection (c)(2) shall apply to trees and
vines planted or grafted after December 31, 2013.
<all>
Ordered to be Reported in the Nature of a Substitute (Amended) by the Yeas and Nays: 23 - 11.
Reported (Amended) by the Committee on Ways and Means. H. Rept. 113-509.
Reported (Amended) by the Committee on Ways and Means. H. Rept. 113-509.
Placed on the Union Calendar, Calendar No. 381.
Rules Committee Resolution H. Res. 661 Reported to House. The resolution provides for the consideration of H.R. 5016 and H.R. 4718. The resolution provides for one hour of debate for each bill. Amendments may be offered to H.R. 5016, however no amendments are in order for H.R. 4718 except for the amendment in the nature of a substitute recommended by the Committee on Ways and Means and modified by the amendment printed in House Report 113-517. One motion to recommit is allowed for each bill.
Rule H. Res. 661 passed House.
Considered under the provisions of rule H. Res. 661. (consideration: CR H6110-6121)
The resolution provides for the consideration of H.R. 5016 and H.R. 4718. The resolution provides for one hour of debate for each bill. Amendments may be offered to H.R. 5016, however no amendments are in order for H.R. 4718 except for the amendment in the nature of a substitute recommended by the Committee on Ways and Means and modified by the amendment printed in House Report 113-517. One motion to recommit is allowed for each bill.
DEBATE - The House proceeded with one hour of debate on H.R. 4718.
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POINT OF ORDER - Mr. Van Hollen raised a point of order against consideration of H.R. 4718 by stating that the bill violated the provisions of the Congressional Budget Act. Subsequently, the Chair ruled that the provisions of H. Res. 661 which provide for the consideration of H.R. 4718, waive all points of order against consideration of the bill.
The previous question was ordered pursuant to the rule. (consideration: CR H6119)
Mr. Neal moved to recommit with instructions to the Committee on Ways and Means. (consideration: CR H6119-6121; text: CR H6119)
DEBATE - The House proceeded with 10 minutes of debate on the motion to recommit with instructions, pending the reservation of a point of order. The instructions contained in the motion seek to require the bill to be reported back to the House with an amendment to extend Bonus Depreciation for 2 additional years instead of a permanent extention. The reservation of a point of order was subsequently withdrawn.
The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H6120)
On motion to recommit with instructions Failed by the Yeas and Nays: 191 - 229 (Roll no. 403). (consideration: CR H6120-6121)
Roll Call #403 (House)Passed/agreed to in House: On passage Passed by recorded vote: 258 - 160 (Roll no. 404).(text: CR H6110-6112)
Roll Call #404 (House)Motion to reconsider laid on the table Agreed to without objection.
On passage Passed by recorded vote: 258 - 160 (Roll no. 404). (text: CR H6110-6112)
Roll Call #404 (House)Received in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 465.