[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 365 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 365

 To amend the Internal Revenue Code of 1986 to exclude working capital 
               in applying the accumulated earnings tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 25, 2005

 Mr. Wilson of South Carolina introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to exclude working capital 
               in applying the accumulated earnings tax.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accumulated Earnings Tax 
Modification Act of 2005''.

SEC. 2. WORKING CAPITAL EXCLUDED FROM ACCUMULATED EARNINGS TAX.

    (a) In General.--Subsection (b) of section 537 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(6) Working capital.--The reasonably anticipated needs of 
        a business shall include working capital for the business in an 
        amount that is not less than the sum of the cost of goods, 
        operating expenses, taxes, and interest expense that the 
        business incurred during the prior taxable year.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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