II 108th CONGRESS 2nd Session S. 2797 IN THE SENATE OF THE UNITED STATES September 14, 2004 Mr. Schumer 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 expand the deduction for college tuition expenses to include expenses for books.

1.

Short title

This Act may be cited as the Textbook Affordability Act of 2004.

2.

Deduction for college book expenses

(a)

In general

Section 222(b)(2) of the Internal Revenue Code of 1986 (relating to applicable dollar limit) is amended— (1)by inserting with respect to qualified tuition and related expenses described in subsection (d)(1)(A)(i) after amount in the matter preceding clause (i) in subparagraph (B), (2)by redesignating subparagraph (C) as subparagraph (F), and (3)by inserting after subparagraph (B) the following new subparagraphs: (C)

Books

In the case of any taxable year beginning after 2003, the applicable dollar amount with respect to qualified tuition and related expenses described in subsection (d)(1)(A)(ii) shall be equal to $1,000 reduced (but not below zero) by the amount determined under subparagraph (D). (D)

Amount of reduction

The amount determined under this subparagraph equals the amount which bears the same ratio to the amount which would be so taken into account as— (i) the excess of— (I) the taxpayer’s adjusted gross income for such taxable year, over (II) $65,000 ($130,000 in the case of a joint return), bears to (ii) $15,000 ($30,000 in the case of a joint return). (E)

Inflation adjustments

(i)

In general

In the case of any taxable year beginning in a calendar year after 2004, both of the dollar amounts in subparagraph (D)(i)(II) shall 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 2003 for calendar year 1992 in subparagraph (B) thereof. (ii)

Rounding

If any amount as adjusted under clause (i) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. . (b)

Expansion of related expenses

Paragraph (1) of section 222(d) of the Internal Revenue Code of 1986 (relating to definitions and special rules) is amended to read as follows: (1)

Qualified tuition and related expenses

(A)

In general

The term qualified tuition and related expenses— (i)has the meaning given such term by section 25(f), and (ii)includes books (within the meaning of section 529(e)(3)(A)(i)). (B)

Special rule

Such expenses shall be reduced in the same manner as under section 25A(g)(2). . (c)

Deduction for books made permanent

Section 222(e) of the Internal Revenue Code of 1986 (relating to termination) is amended by striking This and inserting Except with respect to qualified tuition and related expenses described in subsection (d)(1)(A)(ii), this. (d)

Effective date

The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2003.