[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3265 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 3265

  To amend the Internal Revenue Code of 1986 to clarify treatment of 
                     employee stock purchase plans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            October 31 (legislative day, September 22), 2000

   Mr. Craig 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 clarify treatment of 
                     employee stock purchase plans.

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

SECTION 1. EXCLUSION OF EMPLOYEE STOCK PURCHASE PLAN STOCK OPTIONS FROM 
              WAGES.

    (a) Exclusion From Wages.--
            (1) Employment taxes.--Section 3121(a) of the Internal 
        Revenue Code of 1986 (relating to definition of wages) is 
        amended by striking ``or'' at the end of paragraph (20), by 
        striking the period at the end of paragraph (21) and inserting 
        ``; or'', and by inserting after paragraph (21) the following 
        new paragraph:
            ``(22) a transfer of a share of stock to any individual 
        pursuant to an exercise of an incentive stock option (as 
        defined in section 422(b)) or under an employee stock purchase 
        plan (as defined in section 423(b)) or any disposition by the 
        individual of such stock.''.
            (2) Unemployment taxes.--Section 3306(b) of the Internal 
        Revenue Code of 1986 (relating to definition of wages) is 
        amended by striking ``or'' at the end of paragraph (16), by 
        striking the period at the end of paragraph (17) and inserting 
        ``; or'', and by inserting after paragraph (17) the following 
        new paragraph:
            ``(18) a transfer of a share of stock to any individual 
        pursuant to an exercise of an incentive stock option (as 
        defined in section 422(b)) or under an employee stock purchase 
        plan (as defined in section 423(b)) or any disposition by the 
        individual of such stock.''.
    (b) Withholding Not Required on Disqualifying Dispositions.--
Section 421(b) of the Internal Revenue Code of 1986 (relating to effect 
of disqualifying dispositions) is amended by adding at the end the 
following new sentence: ``For purposes of chapter 24 of subtitle C (but 
not section 41(b)(2)(D)(i)), a disposition described in the preceding 
sentence shall not be considered to be wages.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning before, on, or after the date of the 
enactment of this Act.
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