II 109th CONGRESS 1st Session S. 1292 IN THE SENATE OF THE UNITED STATES June 23, 2005 Mr. Santorum 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 allow a credit against income tax for expenses incurred in teleworking.

1.

Short title

This Act may be cited as the Telework Tax Incentive Act.

2.

Findings

The Congress finds as follows: (1)Federal, State, and local governments spend billions of dollars annually on the Nation’s transportation needs. (2)Congestion on the Nation’s roads costs over $63,000,000,000 annually in lost work time, fuel consumption, and costs of infrastructure and equipment repair. (3)On average, on-road-vehicles contribute 34 percent of nitrogen oxides emissions. (4)It is estimated that staying at home to work requires 3 times less energy consumption than commuting to work. (5)In 2000, it was reported that if an identified 10 to 20 percent of commuters switched to teleworking, 1,800,000 tons of regulated pollutants would be eliminated, 3,500,000,000 gallons of gas would be saved, 3,100,000,000 hours of personal time would be freed up, and maintenance and infrastructure costs would decrease by $500,000,000 annually because of reduced congestion and reduced vehicle miles traveled. (6)The average American daily commute is 49 minutes for a 24-mile round-trip (a total of 100 hours per year). (7)The increase in work from 1969 to 1996, the increase in hours mothers spend in paid work, combined with a shift toward single-parent families resulted in families on average experiencing a decrease of 22 hours a week (14 percent) in parental time available outside of paid work they could spend with their children. (8)Today 60 percent of the workforce is involved in information work (an increase of 43 percent since 1990) allowing and encouraging decentralization of paid work to occur. (9)Estimates indicate that about 40,000,000 Americans are currently teleworking.

3.

Credit for teleworking

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to foreign tax credit, etc.) is amended by adding at the end the following new section:

30B.

Teleworking credit

(a)

Allowance of credit

In the case of an eligible taxpayer, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified teleworking expenses paid or incurred by the taxpayer during such year. (b)

Maximum credit

(1)

Per teleworker limitation

The credit allowed by subsection (a) for a taxable year with respect to qualified teleworking expenses paid or incurred by or on behalf of an individual teleworker shall not exceed $500. (2)

Reduction for teleworking less than full year

In the case of an individual who is in a teleworking arrangement for less than a full taxable year, the amount referred to paragraph (1) shall be reduced by an amount which bears the same ratio to $500 as the number of months in which such individual is not in a teleworking arrangement bears to 12. For purposes of the preceding sentence, an individual shall be treated as being in a teleworking arrangement for a month if the individual is subject to such arrangement for any day of such month. (c)

Definitions

For purposes of this section— (1)

Eligible taxpayer

The term eligible taxpayer means— (A)in the case of an individual, an individual who performs services for an employer under a teleworking arrangement, and (B)in the case of an employer, an employer for whom employees perform services under a teleworking arrangement. (2)

Teleworking arrangement

The term teleworking arrangement means an arrangement under which an employee teleworks for an employer not less than 75 days per year. (3)

Qualified teleworking expenses

The term qualified teleworking expenses means expenses paid or incurred under a teleworking arrangement for furnishings and electronic information equipment which are used to enable an individual to telework. (4)

Telework

The term telework means to perform work functions, using electronic information and communication technologies, thereby reducing or eliminating the physical commute to and from the traditional worksite. (d)

Limitation based on amount of tax

(1)

Liability for tax

The credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of— (A)the regular tax for the taxable year, reduced by the sum of the credits allowable under subpart A and the preceding sections of this subpart, over (B)the tentative minimum tax for the taxable year. (2)

Carryforward of unused credit

If the amount of the credit allowable under subsection (a) for any taxable year exceeds the limitation under paragraph (1) for the taxable year, the excess shall be carried to the succeeding taxable year and added to the amount allowable as a credit under subsection (a) for such succeeding taxable year. (e)

Special rules

(1)

Basis reduction

The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (d)). (2)

Recapture

The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit. (3)

Property used outside United States not qualified

No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179. (4)

Election to not take credit

No credit shall be allowed under subsection (a) for any expense if the taxpayer elects to not have this section apply with respect to such expense. (5)

Denial of double benefit

No deduction or credit (other than under this section) shall be allowed under this chapter with respect to any expense which is taken into account in determining the credit under this section.

. (b)

Conforming amendments

(1)Subsection (a) of section 1016 of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting , and, and by adding at the end the following new paragraph: (32)to the extent provided in section 30B(e)(1), in the case of amounts with respect to which a credit has been allowed under section 30B. . (2)Section 55(c)(3) of such Code is amended by inserting 30B(d), after 30(b)(3),. (3)Section 6501(m) of such Code is amended by inserting 30B(e)(4), after 30(d)(4),. (c)

Clerical amendment

The table of sections for subpart B 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. 30B. Teleworking credit. . (d)

Effective date

The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.