,i  #aahth ,,congress  #b;d ,session    
,h4 ,r4 #hdja  ,,in ,,the ,,house ,,of  
,,representatives  ,may #ae1 #bjbd,mr4  
,blumenauer introduced the following    
bill2 which was referred to the         
,committee on ,ways and ,means  ,a      
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to allow a credit for a 
portion of employer social security     
taxes paid with respect to service      
charges paid by the employer to an      
employee in the form of wages1 and for  
other purposes4  #a4 ,short title ,this 
,act may be cited as the ,restaurant    
,service ,charge ,fairness ,act4  #b4   
,credit for portion of employer social  
security taxes paid with respect to     
service charges  7a7 ,in general        
,section #de;,b7b7 of the ,internal     
,revenue ,code of #aihf is amended--    
7#a7 in paragraph 7#a7-- 7,a7 by        
striking with respect to tips received  
by an employee and inserting with       
respect to either-- 7,a7 tips received  
by an employee  1  7,b7 by redesignating

 subparagraphs 7,a7 and 7,b7 as clauses 
7i7 and 7ii71  7,c7 by striking the     
period at the end and inserting 1 or1   
and  7,d7 by adding at the end the      
following new subparagraph3  7,b7       
service charges received by an employee 
during any month1 to the extent that    
such service charges-- 7i7 are deemed to
 have been paid by the employer to the  
employee in the form of wages1 and that 
such payment is only provided to        
non-management employees1 and  7ii7     
exceed the amount by which the wages    
7excluding payments from service        
charges7 paid by the employer to the    
employee during such month are less than
 the total amount which would be payable
 7with respect to such employment7 at   
the minimum wage rate applicable to such
 individual under section #f7;a77#a7 of 
the ,fair ,labor ,standards ,act of     
#aich 7determined without regard to     
section #c7m7 of such ,act74  1  7#b7 in
 paragraph 7#b71 by striking paragraph  
7#a7 and inserting paragraph 7#a77;,a71 

and  7#c7 by adding at the end the      
following new paragraphs3  7#c7 ,only   
one category of excess employer social  
security tax taken into account during  
the taxable year ,in applying paragraph 
7#a71 an employer may elect to claim a  
credit with respect to either tax paid  
with respect to tips described in       
subparagraph 7,a7 of such paragraph or  
tax paid with respect to service charges
 described in subparagraph 7,b7 of such 
paragraph1 but not both4  7#d7          
,limitation on service charges taken    
into account ,in applying paragraph     
7#a77;,b71 there shall be taken into    
account only so much of the service     
charges as does not exceed #be percent  
of the gross receipts of the employer   
for the taxable year4  7#e7             
,non-management employee ,for purposes  
of this section1 the term non-management
 employee means any employee who does   
not qualify for an exemption under      
section #ac of the ,fair ,labor         
,standards ,act of #aich 7#bi ,u4,s4,c4 

#bac74  7#f7 ,wages ,for purposes of    
this section1 the term wages has the    
meaning given such term in section      
#caba7;a74  4  7b7 ,conforming          
amendments  7#a7 ,section #cajb7;c7 of  
such ,code is amended-- 7,a7 in the     
heading1 by inserting or service charges
 after tips1 and  7,b7 by striking tips 
each place it appears and inserting tips
 or service charges4  7#b7 ,section     
#fjec of such ,code is amended by       
striking tips each place it appears and 
inserting tips or service charges4  7c7 
,effective date ,the amendment made by  
this section shall apply to taxes paid  
in taxable years beginning after        
,december #ca1 #bjbd4