,i #aad? ,,congress #b;d ,session ,h4 ,r4 #ecgd ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,may #bg1 #bjaf ,mr4 ,hultgr5 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to provide a l[] rate ( tax on a portion ( pass-?r\gh bus9ess income1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,br+ ,small ,bus9esses ,back ,tax ,re=m ,act4 #b4 ,special individual rates = qualifi$ small bus9ess income 7a7 ,9 g5]al ,section #a ( su* ,code is am5d$ by add+ at ! end ! foll[+3 7j7 ,maximum rate on qualifi$ small bus9ess income 7#a7 ,9 g5]al ,if a taxpay] has qualifi$ bus9ess income = any taxable ye>1 ! tax impos$ by ?is section = su* taxable ye> %all n exce$ ! sum (-- 7,a7 a tax comput$ at ! rates & 9 ! same mann] z if ?is subsection _h n be5 enact$ on taxable income r$uc$ by qualifi$ bus9ess income1 7,b7 #aj p]c5t ( s mu* ( ! qualifi$ bus9ess income ( ! taxpay] z does n exce$ #aej1jjj1 plus 7,c7 #bj p]c5t ( s mu* ( ! qualifi$ bus9ess income ( ! taxpay] z exce$s ! am\nt on :i* tax is det]m9$ "u subp>agraph 7,b74 7#b7 ,qualifi$ bus9ess income 7,a7 ,9 g5]al ,! t]m qualifi$ bus9ess income means s mu* ( ! foll[+ ( ! taxpay] z does n exce$ #a1jjj1jjj3 7i7 ,gross e>n+s d]iv$ by an individual f any active trade or bus9ess c>ri$ on by su* individual1 less ! d$uctions all[$ by ! subtitle :i* are attributable to su* trade or bus9ess4 7ii7 ,! taxpay]'s di/ributive or pro rata %>e qualifi$ pass-?r\gh income4 ,su* t]m %all n include any am\nts1 or any di/ributive or pro rata %>e1 attributable to capital ga9s1 int]e/1 divid5ds1 & royalties4 7,b7 ,qualifi$ pass-?r\gh income ,! t]m qualifi$ pass-?r\gh income means1 9 ! case ( a p>tn]%ip or ,s corporation1 s mu* ( ! income ( ! p>tn]%ip comput$ "u section #gjc1 or income ( ! ,s corporation comput$ "u section #acfc1 z does n exce$ #a1jjj1jjj & is designat$ z su* 7at su* "t & 9 su* =m & mann] z ! ,secret>y %all prescribe7 & allocat$ by ! p>tn]%ip or ,s corporation4 ,any income s designat$ %all be allocat$ among/ p>tn]s or %>ehold]s 9 ! same proportion z di/ributive or pro rata %>es ( income or loss are allocat$4 ,su* t]m %all n include any capital ga9s1 int]e/1 divid5ds1 or royalties4 7#c7 ,special rules 7,a7 ,mat]ial p>ticipation ,p>agraph 7#a7 %all n apply ) respect to any income attributable to a trade or bus9ess 9 :i* ! taxpay] does n mat]ially p>ticipate4 7,b7 ,coord9ation ) capital ga9s ,?is subsection %all be appli$ be=e ! application ( subsection 7h74 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjaf4 #c4 ,repeal ( limitation on election to exp5se c]ta9 depreciable asset 9 case ( non-,c ,corp taxpay]s 7a7 ,9 g5]al ,p>agraphs 7#a7 & 7#b7 ( section #agi7;b7 ( ! ,int]nal ,rev5ue ,code ( #aihf are ea* am5d$ by /rik+ ,! & ins]t+ ,9 ! case ( a corporation 7or any p>tn]%ip ) a corporation z a p>tn]71 !4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjaf4 #d4 ,exp&$ availability ( ca% acc\nt+ rules & exception to inv5tory rules = c]ta9 small bus9esses 7a7 ,ca% acc\nt+ p]mitt$ 7#a7 ,9 g5]al ,section #ddf ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subsection3 7g7 ,c]ta9 small bus9ess taxpay]s p]mitt$ ,to use ca% acc\nt+ me?od )\t limitation 7#a7 ,9 g5]al ,) respect to an eligible taxpay] :o uses ! ca% receipts & disbursem5ts me?od = any taxable ye>1 su* me?od %all be deem$ to cle>ly reflect income & ! taxpay] %all n be requir$ to use an accrual me?od4 7#b7 ,eligible taxpay] ,= purposes ( ?is subsection1 a taxpay] is an eligible taxpay] ) respect to any taxable ye> if-- 7,a7 = all prior taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjaf1 ! taxpay] 7or any pr$ecessor7 met ! gross receipts te/ ( section #ddh7;c71 & 7,b7 ! taxpay] is n subject to section #ddg or #ddh4 4 7#b7 ,expansion ( gross receipts te/ 7,a7 ,9 g5]al ,p>agraph 7#c7 ( section #ddh7;b7 ( su* ,code is am5d$ by /rik+ #e1jjj1jjj 9 ! text & 9 ! head+ & ins]t+ #be1jjj1jjj4 7,b7 ,con=m+ am5dm5ts ,section #ddh7;c7 ( su* ,code is am5d$ by /rik+ #e1jjj1jjj ea* place x appe>s 9 ! text & 9 ! head+ ( p>agraph 7#a7 & ins]t+ #be1jjj1jjj4 7#c7 ,f>m+ 7,a7 ,9 g5]al ,section #ddg7;d77#a7 ( su* ,code is am5d$ by /rik+ #a1jjj1jjj & ins]t+ #be1jjj1jjj4 7,b7 ,con=m+ am5dm5t ,section #ddg7;d77#b7 ( su* ,code is am5d$-- 7i7 by /rik+ 2 & & all t foll[s ?r\gh to ! end & ins]t+ a p]iod1 & 7ii7 by /rik+ %all be appli$-- & all t foll[s ?r\gh 7i7 by sub/itut+ & ins]t+ ! foll[+3 %all be appli$ by sub/itut+4 7b7 ,inv5tory rules 7#a7 ,9 g5]al ,section #dga ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ subsection 7c7 z subsection 7d7 & by ins]t+ aft] subsection 7b7 ! foll[+ new subsection3 7c7 ,small bus9ess taxpay]s n requir$ ,to use inv5tories 7#a7 ,9 g5]al ,an eligible taxpay] 7z def9$ 9 section #ddf7;g77#b77 %all n be requir$ to use inv5tories "u ?is section = a taxable ye>4 7#b7 ,treatm5t ( taxpay]s n us+ inv5tories ,if an eligible taxpay] 7z s def9$7 does n use inv5tories ) respect to any prop]ty = a taxable ye>1 any co/ :i* 7b = p>agraph 7#a77 w\ld h be5 includ$ by ! taxpay] 9 inv5tory co/s %all be treat$ z an exp5se :i* is d$uctible = ! taxable ye> 9 :i* ! prop]ty is pur*as$4 4 7#b7 ,con=m+ am5dm5t ,section #bfc;,a7c7 ( su* ,code is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,exclusion f inv5tory rules ,?is section %all n apply to prop]ty ) respect to :i* a taxpay] does n use inv5tories pursuant to section #dga7;c74 4 7c7 ,effective date & special rules 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjaf4 7#b7 ,*ange 9 me?od ( acc\nt+ ,9 ! case ( any taxpay] *ang+ ! taxpay]'s me?od ( acc\nt+ = any taxable ye> "u ! am5dm5ts made by ?is section-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]2 & 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y ( ! ,treasury4