[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1656 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1656

To amend the Internal Revenue Code of 1986 to provide for the treatment 
 of S corporations for purposes of election of the alternative tax on 
        qualifying shipping activities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 9, 2009

Ms. Stabenow (for herself, Mr. Voinovich, Mr. Levin, and Ms. Klobuchar) 
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 the treatment 
 of S corporations for purposes of election of the alternative tax on 
        qualifying shipping activities, and for other purposes.

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

SECTION 1. TREATMENT OF S CORPORATIONS FOR PURPOSES OF ELECTION OF THE 
              ALTERNATIVE TAX ON QUALIFYING SHIPPING ACTIVITIES.

    (a) In General.--Section 1352 of the Internal Revenue Code of 1986 
is amended to read as follows:

``SEC. 1352. ALTERNATIVE TAX ON QUALIFYING SHIPPING ACTIVITIES.

    ``(a) In General.--In the case of an electing corporation other 
than an S corporation, the tax imposed by section 11 shall be the 
amount equal to the sum of--
            ``(1) the tax imposed by section 11 determined after the 
        application of this subchapter, and
            ``(2) a tax equal to--
                    ``(A) the highest rate of tax specified in section 
                11, multiplied by
                    ``(B) the notional shipping income for the taxable 
                year.
    ``(b) S Corporations.--In the case of an electing corporation which 
is an S corporation, the notional shipping income of such S corporation 
shall be taken into account under section 1366 by a shareholder of such 
S corporation in lieu of the income excluded under section 1357.''.
    (b) Surtax Imposed on Tonnage Tax Differential Amount.--Subsection 
(f) of section 1366 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
            ``(4) Surtax on tonnage tax differential amount.--In the 
        case of a shareholder of an S corporation which is an electing 
        corporation for purposes of subchapter R of this chapter, the 
        tax determined under this chapter (other than this paragraph) 
        with respect to such shareholder for any taxable year in which 
        the shareholder takes into account notional shipping income 
        shall be increased by an amount equal to 15 percent of the 
        excess, if any, of--
                    ``(A) the shareholder's pro rata share of the 
                amount which would be included in gross income of the 
                corporation but for the application of section 1357, 
                over
                    ``(B) the shareholder's pro rata share of the 
                notional shipping income (as defined in section 1353) 
                of the corporation.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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