S. 1141 — Introduced in Senate

II 114th CONGRESS 1st Session S. 1141 IN THE SENATE OF THE UNITED STATES April 30, 2015Ms. Collins (for herself and Mr. Casey) 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 provide tax incentives for small businesses. 1. Short title This Act may be cited as the Small Business Tax Certainty and Growth Act of 2015. 2. Sense of the Senate regarding tax reform It is the sense of the Senate that Congress should undertake comprehensive tax reform legislation to— (1) make our system fairer and simpler; and (2) promote economic growth. 3. Permanent doubling of deductions for start-up expenses, organizational expenses, and syndication fees (a) Start-Up expenses (1) In general Clause (ii) of section 195(b)(1)(A) of the Internal Revenue Code of 1986 is amended— (A) by striking $5,000 and inserting $10,000, and (B) by striking $50,000 and inserting $60,000. (2) Conforming amendment Subsection (b) of section 195 of such Code is amended by striking paragraph (3). (b) Organizational expenses Subparagraph (B) of section 248(a)(1) of the Internal Revenue Code of 1986 is amended— (1) by striking $5,000 and inserting $10,000, and (2) by striking $50,000 and inserting $60,000. (c) Organization and syndication fees Clause (ii) of section 709(b)(1)(A) of the Internal Revenue Code of 1986 is amended— (1) by striking $5,000 and inserting $10,000, and (2) by striking $50,000 and inserting $60,000. (d) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years ending on or after the date of the enactment of this Act. 4. Clarification of cash accounting rules for small business (a) Cash accounting permitted (1) In general Section 446 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (g) Certain small business taxpayers permitted To use cash accounting method without limitation (1) In general An eligible taxpayer shall not be required to use an accrual method of accounting for any taxable year. (2) Eligible taxpayer For purposes of this subsection, a taxpayer is an eligible taxpayer with respect to any taxable year if— (A) for all prior taxable years beginning after December 31, 2015, the taxpayer (or any predecessor) met the gross receipts test of section 448(c), and (B) the taxpayer is not subject to section 447 or 448. . (2) Expansion of gross receipts test (A) In general Paragraph (3) of section 448(b) of such Code is amended by striking $5,000,000 in the text and in the heading and inserting $10,000,000. (B) Conforming amendments Section 448(c) of such Code is amended— (i) by striking $5,000,000 each place it appears in the text and in the heading of paragraph (1) and inserting $10,000,000, and (ii) by adding at the end the following new paragraph: (4) Inflation adjustment In the case of any taxable year beginning in a calendar year after 2016, the dollar amount contained in subsection (b)(3) and paragraph (1) of this subsection 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 2015 for calendar year 1992 in subparagraph (B) thereof. If any amount as adjusted under this subparagraph is not a multiple of $100,000, such amount shall be rounded to the nearest multiple of $100,000. . (b) Clarification of inventory rules for small business (1) In general Section 471 of the Internal Revenue Code of 1986 is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: (c) Small business taxpayers not required To use inventories (1) In general A qualified taxpayer shall not be required to use inventories under this section for a taxable year. (2) Treatment of taxpayers not using inventories If a qualified taxpayer does not use inventories with respect to any property for any taxable year beginning after December 31, 2015, such property shall be treated as a material or supply which is not incidental. (3) Qualified taxpayer For purposes of this subsection, the term qualified taxpayer means— (A) any eligible taxpayer (as defined in section 446(g)(2)), and (B) any taxpayer described in section 448(b)(3). . (2) Increased eligibility for simplified dollar-value LIFO method Section 474(c) of such Code is amended by striking $5,000,000 and inserting the dollar amount in effect under section 448(c)(1). (c) Effective date and special rules (1) In general The amendments made by this section shall apply to taxable years beginning after December 31, 2015. (2) Change in method of accounting In the case of any taxpayer changing the taxpayer’s method of accounting for any taxable year under the amendments made by this section— (A) such change shall be treated as initiated by the taxpayer; (B) such change shall be treated as made with the consent of the Secretary of the Treasury; and (C) the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period (not greater than 4 taxable years) beginning with such taxable year. 5. Permanent extension of expensing limitation (a) Dollar limitation Section 179(b)(1) of the Internal Revenue Code of 1986 is amended by striking shall not exceed and all that follows and inserting shall not exceed $500,000.. (b) Reduction in limitation Section 179(b)(2) of the Internal Revenue Code of 1986 is amended by striking exceeds and all that follows and inserting exceeds $2,000,000.. (c) Inflation adjustment Subsection (b) of section 179 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (6) Inflation adjustment (A) In general In the case of any taxable year beginning in a calendar year after 2016, the $500,000 in paragraph (1) and the $2,000,000 amount in paragraph (2) shall each 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 2015 for calendar year 1992 in subparagraph (B) thereof. (B) Rounding (i) Dollar limitation If the amount in paragraph (1) as increased under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000. (ii) Phaseout amount If the amount in paragraph (2) as increased under subparagraph (A) is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000. . (d) Computer software Section 179(d)(1)(A)(ii) of the Internal Revenue Code of 1986 is amended by striking and before 2015. (e) Election Section 179(c)(2) of the Internal Revenue Code of 1986 is amended by striking and before 2015. (f) Special rules for treatment of qualified real property (1) In general Section 179(f)(1) of the Internal Revenue Code of 1986 is amended by striking after 2009 and before 2015 and inserting after 2009. (2) Conforming amendment Section 179(f) of such Code is amended by striking paragraph (4). (g) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2015. 6. Extension of bonus depreciation (a) In general Paragraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended— (1) by striking January 1, 2016 in subparagraph (A)(iv) and inserting January 1, 2017, and (2) by striking January 1, 2015 each place it appears and inserting January 1, 2016. (b) Special rule for Federal long-Term contracts Clause (ii) of section 460(c)(6)(B) of the Internal Revenue Code of 1986 is amended by striking January 1, 2015 (January 1, 2016 and inserting January 1, 2016 (January 1, 2017. (c) Conforming Amendments (1) The heading for subsection (k) of section 168 of the Internal Revenue Code of 1986 is amended by striking January 1, 2015 and inserting January 1, 2016. (2) The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking Pre-January 1, 2015 and inserting Pre-January 1, 2016. (3) Section 168(k)(4)(D) of such Code 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) January 1, 2016 shall be substituted for January 1, 2017 in subparagraph (A)(iv) thereof, and (v) January 1, 2015 shall be substituted for January 1, 2016 each place it appears in subparagraph (A) thereof. . (4) Section 168(l)(4) of such Code is amended by striking and at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph: (B) by substituting January 1, 2015 for January 1, 2016 in clause (i) thereof, and . (5) Clause (ii) of section 168(n)(2)(C) of such Code is amended by striking January 1, 2015 and inserting January 1, 2016. (6) Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking January 1, 2015 and inserting January 1, 2016. (7) Subparagraph (B) of section 1400N(d)(3) of such Code is amended by striking January 1, 2015 and inserting January 1, 2016. (d) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2015, in taxable years ending after such date. 7. Extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements (a) In general Subparagraph (E) of section 168(e)(3) of the Internal Revenue Code of 1986 is amended— (1) by striking property placed in service before January 1, 2015, in clauses (iv) and (v) and inserting property,, and (2) by striking , and before January 1, 2015 in clause (ix). (b) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2015.