Start Advancing Firearms Enhancements and Technology Act of 2018 or the SAFETY Act
This bill increases the rate of the research tax credit from 20% to 30% for research expenses to develop smart gun technologies. The bill also modifies the excise tax on the sale of firearms to exempt the portion of the sale price that is attributable to smart gun technology.
"Smart gun technology" is technology (other than a simple mechanical lock) that is designed to (1) prevent a firearm from being fired by any individual other than an authorized user; and (2) convert the firearm from the inoperable condition to the operable condition in less than two seconds after the authorized user makes contact with the firearm, the firearm's arming device, or an external safe or locking device.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 942 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 942
To amend the Internal Revenue Code of 1986 to provide an enhanced
research credit for the development of smart gun technologies.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 31, 2019
Mr. Himes (for himself, Ms. Kuster of New Hampshire, Ms. Hill of
California, Ms. Clarke of New York, Mr. Deutch, Mr. Perlmutter, Mr.
Soto, and Mrs. Murphy) 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 provide an enhanced
research credit for the development of smart gun technologies.
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 ``Start Advancing Firearms
Enhancements and Technology Act of 2018'' or the ``SAFETY Act''.
SEC. 2. ENHANCED RESEARCH CREDIT FOR DEVELOPMENT OF SMART GUN
TECHNOLOGIES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 45S the following new section:
``SEC. 45T. RESEARCH EXPENSES FOR SMART GUN TECHNOLOGIES.
``(a) General Rule.--For purposes of section 38, in the case of a
taxpayer who is a Federal firearms licensee, the smart gun technology
credit determined under this section for the taxable year is an amount
equal to 30 percent of the excess of--
``(1) the smart gun technology expenses for the taxable
year, over
``(2) the base amount.
``(b) Smart Gun Technology Expenses; Base Amount.--For purposes of
this section--
``(1) Smart gun technology expenses.--
``(A) In general.--Except as otherwise provided in
this paragraph, the term `smart gun technology
expenses' means the amounts which are paid or incurred
by the taxpayer during the taxable year which would be
described in section 41(b) if such section were applied
with the modifications set forth in subparagraph (B).
``(B) Modifications.--For purposes of subparagraph
(A), section 41(b) shall be applied--
``(i) by substituting `smart gun technology
research' for `qualified research' each place
it appears in paragraphs (2) and (3) of such
subsection, and
``(ii) by substituting `100 percent' for
`65 percent' in paragraph (3)(A) of such
subsection.
``(C) Exclusion for amounts funded by grants,
etc.--The term `smart gun technology expenses' shall
not include any amount to the extent such amount is
funded by any grant, contract, or otherwise by another
person (or any governmental entity).
``(2) Base amount.--
``(A) In general.--Except as provided in
subparagraph (B), the term `base amount' means the
amount which would be the base amount in section 41(c)
if such section were applied by substituting `smart gun
technology research' for `qualified research' each
place it appears.
``(B) Base amount is zero for 3 years.--The base
amount shall be zero for purposes of determining the
amount of credit for taxable years beginning in 2019,
2020, or 2021.
``(c) Smart Gun Technology Research.--For purposes of this
section--
``(1) In general.--The term `smart gun technology research'
means qualified research (as defined in section 41(d)) for the
purpose of developing smart gun technologies for firearms.
``(2) Smart gun technology.--The term `smart gun
technology' means any technology (other than a simple
mechanical lock) which is designed--
``(A) to prevent a firearm from being fired by any
individual other than an authorized user of the
firearm, and
``(B) to convert the firearm from the inoperable
condition to the operable condition in less than 2
seconds after the authorized user makes contact with
the firearm, the firearm's arming device, or an
external safe or locking device.
``(3) Authorized user.--For purposes of this subsection,
the term `authorized user' means, with respect to a firearm,
the owner of the firearm and any individual lawfully authorized
by such owner to operate the firearm.
``(4) Simple mechanical lock.--For purposes of this
subsection, the term `simple mechanical lock' means a lock that
uses a key or a conventional combination lock. Such term does
not include an advanced lock that incorporates electronics or
biometric sensors, or a lock with other features to enable
faster opening from any orientation with low visibility.
``(d) Federal Firearms Licensee.--For purposes of this section, the
term `Federal firearms licensee' means any person holding a license
under chapter 44 of title 18, United States Code, other than a licensed
collector.
``(e) Coordination With Credit for Increasing Research
Expenditures.--
``(1) In general.--Except as provided in paragraph (2), any
smart gun technology expenses for a taxable year to which an
election under this section applies shall not be taken into
account for purposes of determining the credit allowable under
section 41 for such taxable year.
``(2) Expenses included in determining base period research
expenses.--Smart gun technology expenses for any taxable year
shall be taken into account in determining base period research
expenses for purposes of applying section 41 to subsequent
taxable years.
``(f) Special Rules.--
``(1) Certain rules made applicable.--Rules similar to the
rules of paragraphs (1) and (2) of section 41(f) shall apply
for purposes of this section.
``(2) Election.--This section shall apply to any taxpayer
for any taxable year only if such taxpayer elects (at such time
and in such manner as the Secretary may by regulations
prescribe) to have this section apply for such taxable year.
``(g) Treatment of Credit for Qualified Small Businesses.--
``(1) In general.--Under rules similar to the rules of
section 41(h), section 3111(f) shall apply to the payroll tax
credit portion of the credit otherwise determined under
subsection (a) for the taxable year and such portion shall not
be treated (other than for purposes of section 280C) as a
credit determined under subsection (a).
``(2) Federal firearms licensee exception.--For purposes of
this subsection, the payroll tax credit portion of the credit
otherwise determined under subsection (a) shall be determined
without regard to whether the taxpayer is a Federal firearms
licensee.''.
(b) Denial of Double Benefit.--Section 280C of such Code is amended
by adding at the end the following new subsection:
``(i) Credit for Smart Gun Technology Expenses.--
``(1) In general.--No deduction shall be allowed for that
portion of the smart gun technology expenses (as defined in
section 45T(b)) otherwise allowable as a deduction for the
taxable year which is equal to the amount of the credit
allowable for the taxable year under section 45T (determined
without regard to section 38(c) thereof).
``(2) Similar rule where taxpayer capitalizes rather than
deducts expenses.--If--
``(A) the amount of the credit allowable for the
taxable year under section 45T (determined without
regard to section 38(c)), exceeds
``(B) the amount allowable as a deduction for the
taxable year for smart gun technology expenses
(determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year
for such expenses shall be reduced by the amount of such
excess.
``(3) Controlled groups.--In the case of a corporation
which is a member of a controlled group of corporations (within
the meaning of section 41(f)(5)) or a trade or business which
is treated as being under common control with other trades or
business (within the meaning of section 41(f)(1)(B)), this
subsection shall be applied under rules prescribed by the
Secretary similar to the rules applicable under subparagraphs
(A) and (B) of section 41(f)(1).''.
(c) Credit Made Part of General Business Credit.--
(1) In general.--Section 38(b) of such Code is amended by
striking ``plus'' at the end of paragraph (31), by striking the
period at the end of paragraph (32) and inserting ``, plus'',
and by adding at the end thereof the following new paragraph:
``(33) in the case of a taxpayer who is a Federal firearms
licensee (as defined in section 45T(d)), the smart gun
technology credit determined under section 45T(a).''.
(2) Deduction for certain unused business credits.--
Subsection (c) of section 196 of such Code is amended by
striking ``and'' at the end of paragraph (13), by striking the
period at the end of paragraph (14) and inserting ``, and'',
and by adding after paragraph (8) the following new paragraph:
``(15) the smart gun technology credit determined under
section 45T.''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 45S the following new
item:
``Sec. 45T. Research expenses for smart gun technologies.''.
(e) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after December 31, 2019, in taxable
years beginning after such date.
SEC. 3. FIREARMS TAX NOT TO APPLY TO COST OF SMART GUN TECHNOLOGY.
(a) In General.--Section 4181 of the Internal Revenue Code of 1986
is amended by adding at the end the following new sentence:
``The price taken into account under the preceding sentence shall
not include so much of the price of the firearm as is attributable to
any smart gun technology (as defined in section 45T(c)(2)) of such
firearm.''.
(b) Effective Date.--The amendment made by this section shall take
effect on January 1, 2020.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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