[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 573 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 573

To amend the Internal Revenue Code of 1986 to provide for a credit for 
  the portion of employer social security taxes paid with respect to 
                          employee cash tips.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 11 (legislative day, March 3), 1993

 Mr. Breaux (for himself, Mr. Dorgan, Mr. Conrad, Mr. Durenberger, Mr. 
  Boren, Mr. Danforth, and Mr. Baucus) 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 for a credit for 
  the portion of employer social security taxes paid with respect to 
                          employee cash tips.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CREDIT FOR PORTION OF EMPLOYER SOCIAL SECURITY TAXES PAID 
              WITH RESPECT TO EMPLOYEE CASH TIPS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45. CREDIT FOR PORTION OF EMPLOYER SOCIAL SECURITY TAXES PAID 
              WITH RESPECT TO EMPLOYEE CASH TIPS.

    ``(a) General Rule.--For purposes of section 38, the employer 
social security credit determined under this section for the taxable 
year is an amount equal to the excess employer social security tax paid 
or incurred by the taxpayer during the taxable year.
    ``(b) Excess Employer Social Security Tax.--For purposes of this 
section, the term `excess employer social security tax' means any tax 
paid by an employer under section 3111 with respect to tips received by 
an employee during any month, to the extent such tips--
            ``(1) are deemed to have been paid by the employer to the 
        employee pursuant to section 3121(q), and
            ``(2) exceed the amount by which the wages (excluding tips) 
        paid by the employer to the employee during such month are less 
        than the total amount which would be payable (with respect to 
        such employment) at the minimum wage rate applicable to such 
        individual under section 6(a)(1) of the Fair Labor Standards 
        Act of 1938 (determined without regard to section 3(m) of such 
        Act).
    ``(c) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any amount taken into account in determining the 
credit under this section.''.
    (b) Credit to be Part of General Business Credit.--
            (1) In general.--Subsection (b) of section 38 of the 
        Internal Revenue Code of 1986 (relating to current year 
        business credit) is amended by striking ``plus'' at the end of 
        paragraph (7), by striking the period at the end of paragraph 
        (8) and inserting ``, plus'', and by adding at the end the 
        following new paragraph:
            ``(9) the employer social security credit determined under 
        section 45(a).''.
            (2) Limitation on carrybacks.--Subsection (d) of section 39 
        of such Code (relating to transitional rules) is amended by 
        adding at the end the following new paragraph:
            ``(4) No carryback of section 45 credit before enactment.--
        No portion of the unused business credit for any taxable year 
        which is attributable to the employer social security credit 
        determined under section 45 may be carried back to a taxable 
        year ending before the date of the enactment of section 45.''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

                              ``Sec. 45. Employer social security 
                                        credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to taxes paid after December 31, 1993.

                                 <all>