[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2237 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 341
112th CONGRESS
  2d Session
                                S. 2237

  To provide a temporary income tax credit for increased payroll and 
    extend bonus depreciation for an additional year, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 26, 2012

 Mr. Reid introduced the following bill; which was read the first time

                             March 27, 2012

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
  To provide a temporary income tax credit for increased payroll and 
    extend bonus depreciation for an additional year, 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. SHORT TITLE.

    This Act may be cited as the ``Small Business Jobs and Tax Relief 
Act''.

SEC. 2. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL.

    (a) In General.--In the case of a qualified employer who elects the 
application of this section, there shall be allowed as a credit against 
the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for 
the taxable year which includes December 31, 2012, an amount equal to 
10 percent of the excess (if any) of--
            (1) the sum of the wages and compensation paid by such 
        qualified employer for qualified services during calendar year 
        2012, over
            (2) the sum of such wages and compensation paid during 
        calendar year 2011.
    (b) Limitation.--The amount of the excess taken into account under 
subsection (a) with respect to any qualified employer shall not exceed 
$5,000,000.
    (c) Wages and Compensation.--For purposes of this section--
            (1) Wages.--The term ``wages'' has the meaning given such 
        term under section 3121 of the Internal Revenue Code of 1986 
        for purposes of the tax imposed by section 3111(a) of such 
        Code.
            (2) Compensation.--The term ``compensation'' has the 
        meaning given such term under section 3231 of such Code for 
        purposes of the portion of the tax imposed by section 3221(a) 
        of such Code that corresponds to the tax imposed by section 
        3111(a) of such Code.
            (3) Application of contribution and benefit base to 
        calendar year 2011.--For purposes of determining wages and 
        compensation under subsection (a)(2), the contribution and 
        benefit base as determined under section 230 of the Social 
        Security Act shall be such amount as in effect for calendar 
        year 2012.
            (4) Special rule when no wages or compensation in 2011.--In 
        any case in which the sum of the wages and compensation paid by 
        a qualified employer for qualified services during calendar 
        year 2011 is zero, then the amount taken into account under 
        subsection (a)(2) shall be 80 percent of the amount taken into 
        account under subsection (a)(1).
            (5) Coordination with other employment credits.--The amount 
        of the excess taken into account under subsection (a) shall be 
        reduced by the sum of all other Federal tax credits determined 
        with respect to wages or compensation paid in calendar year 
        2012.
    (d) Other Definitions.--
            (1) Qualified employer.--For purposes of this section--
                    (A) In general.--The term ``qualified employer'' 
                has the meaning given such term under section 
                3111(d)(2) of the Internal Revenue Code of 1986, 
                determined by substituting ``section 101 of the Higher 
                Education Act of 1965'' for ``section 101(b) of the 
                Higher Education Act of 1965'' in subparagraph (B) 
                thereof.
                    (B) Aggregation rules.--Rules similar to the rules 
                of sections 414(b), 414(c), 414(m), and 414(o) of such 
                Code shall apply to determine when multiple entities 
                shall be treated as a single employer, and rules with 
                respect to predecessor and successor employers may be 
                applied, in such manner as may be prescribed by the 
                Secretary of the Treasury or the Secretary's designee 
                (in this section referred to as the ``Secretary'').
            (2) Qualified services.--The term ``qualified services'' 
        means services performed by an individual who is not described 
        in section 51(i)(1) of such Code (applied by substituting 
        ``qualified employer'' for ``taxpayer'' each place it 
        appears)--
                    (A) in a trade or business of the qualified 
                employer, or
                    (B) in the case of a qualified employer exempt from 
                tax under section 501(a) of such Code, in furtherance 
                of the activities related to the purpose or function 
                constituting the basis of the employer's exemption 
                under section 501 of such Code.
    (e) Application of Certain Rules.--Rules similar to the rules of 
sections 280C(a) and 6501(m) of the Internal Revenue Code of 1986 shall 
apply with respect to the credit determined under this section.
    (f) Treatment of Credit.--For purposes of the Internal Revenue Code 
of 1986--
            (1) Taxable employers.--
                    (A) In general.--The credit allowed under 
                subsection (a) with respect to qualified services 
                described in subsection (d)(2)(A) for any taxable year 
                shall be added to the current year business credit 
                under section 38(b) of such Code for such taxable year 
                and shall be treated as a credit allowed under subpart 
                D of part IV of subchapter A of chapter 1 of such Code.
                    (B) Limitation on carrybacks.--No portion of the 
                unused business credit under section 38 of such Code 
                for any taxable year which is attributable to an 
                increase in the current year business credit by reason 
                of subparagraph (A) may be carried to a taxable year 
                beginning before the date of the enactment of this 
                section.
            (2) Tax-exempt employers.--
                    (A) In general.--The credit allowed under 
                subsection (a) with respect to qualified services 
                described in subsection (d)(2)(B) for any taxable 
                year--
                            (i) shall be treated as a credit allowed 
                        under subpart C of part IV of subchapter A of 
                        chapter 1 of such Code, and
                            (ii) shall be added to the credits 
                        described in subparagraph (A) of section 
                        6211(b)(4) of such Code.
                    (B) Conforming amendment.--Section 1324(b)(2) of 
                title 31, United States Code, is amended by inserting 
                ``or due under section 2 of the Small Business Jobs and 
                Tax Relief Act'' after ``the Housing Assistance Tax Act 
                of 2008''.
    (g) Treatment of Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possessions.--The Secretary shall 
                pay to each possession of the United States with a 
                mirror code tax system amounts equal to the loss to 
                that possession by reason of the application of 
                subsections (a) through (f). Such amounts shall be 
                determined by the Secretary based on information 
                provided by the government of the respective possession 
                of the United States.
                    (B) Other possessions.--The Secretary shall pay to 
                each possession of the United States which does not 
                have a mirror code tax system the amount estimated by 
                the Secretary as being equal to the loss to that 
                possession that would have occurred by reason of the 
                application of subsections (a) through (f) if a mirror 
                code tax system had been in effect in such possession. 
                The preceding sentence shall not apply with respect to 
                any possession of the United States unless such 
                possession establishes to the satisfaction of the 
                Secretary that the possession has implemented (or, at 
                the discretion of the Secretary, will implement) an 
                income tax benefit which is substantially equivalent to 
                the income tax credit allowed under such subsections.
            (2) Coordination with credit allowed against united states 
        income taxes.--No increase in the credit determined under 
        section 38(b) of the Internal Revenue Code of 1986 against 
        United States income taxes for any taxable year determined by 
        reason of subsection (f)(1)(A) shall be taken into account with 
        respect to any person--
                    (A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of this section for 
                such taxable year, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to such 
                taxable year.
            (3) Definitions and special rules.--
                    (A) Possession of the united states.--For purposes 
                of this subsection, the term ``possession of the United 
                States'' includes American Samoa, Guam, the 
                Commonwealth of the Northern Mariana Islands, the 
                Commonwealth of Puerto Rico, and the United States 
                Virgin Islands.
                    (B) Mirror code tax system.--For purposes of this 
                subsection, the term ``mirror code tax system'' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States.
                    (C) Treatment of payments.--For purposes of section 
                1324(b)(2) of title 31, United States Code, the 
                payments under this subsection shall be treated in the 
                same manner as a refund due from credit provisions 
                described in such section.
    (h) Regulations.--The Secretary shall prescribe such regulations or 
guidance as are necessary to carry out the provisions of this section.

SEC. 3. EXTENSION OF ALLOWANCE FOR BONUS DEPRECIATION FOR CERTAIN 
              BUSINESS ASSETS.

    (a) Extension of 100 Percent Bonus Depreciation.--
            (1) In general.--Paragraph (5) of section 168(k) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by striking ``January 1, 2012'' each place it 
                appears and inserting ``January 1, 2013'', and
                    (B) by striking ``January 1, 2013'' and inserting 
                ``January 1, 2014''.
            (2) Conforming amendments.--
                    (A) The heading for paragraph (5) of section 168(k) 
                of such Code is amended by striking ``pre-2012 
                periods'' and inserting ``pre-2013 periods''.
                    (B) Clause (ii) of section 460(c)(6)(B) of such 
                Code is amended by striking ``January 1, 2011 (January 
                1, 2012'' and inserting ``January 1, 2013 (January 1, 
                2014''.
            (3) Effective dates.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the amendments made by this section shall apply to 
                property placed in service after December 31, 2011.
                    (B) Conforming amendment.--The amendment made by 
                paragraph (2)(B) shall apply to property placed in 
                service after December 31, 2010.
    (b) Expansion of Election To Accelerate AMT Credits in Lieu of 
Bonus Depreciation.--
            (1) In general.--Paragraph (4) of section 168(k) of the 
        Internal Revenue Code of 1986 is amended to read as follows:
            ``(4) Election to accelerate amt credits in lieu of bonus 
        depreciation.--
                    ``(A) In general.--If a corporation elects to have 
                this paragraph apply for any taxable year--
                            ``(i) paragraph (1) shall not apply to any 
                        eligible qualified property placed in service 
                        by the taxpayer in such taxable year,
                            ``(ii) the applicable depreciation method 
                        used under this section with respect to such 
                        property shall be the straight line method, and
                            ``(iii) the limitation imposed by section 
                        53(c) for such taxable year shall be increased 
                        by the bonus depreciation amount which is 
                        determined for such taxable year under 
                        subparagraph (B).
                    ``(B) Bonus depreciation amount.--For purposes of 
                this paragraph--
                            ``(i) In general.--The bonus depreciation 
                        amount for any taxable year is an amount equal 
                        to 20 percent of the excess (if any) of--
                                    ``(I) the aggregate amount of 
                                depreciation which would be allowed 
                                under this section for eligible 
                                qualified property placed in service by 
                                the taxpayer during such taxable year 
                                if paragraph (1) applied to all such 
                                property, over
                                    ``(II) the aggregate amount of 
                                depreciation which would be allowed 
                                under this section for eligible 
                                qualified property placed in service by 
                                the taxpayer during such taxable year 
                                if paragraph (1) did not apply to any 
                                such property.
                        The aggregate amounts determined under 
                        subclauses (I) and (II) shall be determined 
                        without regard to any election made under 
                        subsection (b)(2)(D), (b)(3)(D), or (g)(7) and 
                        without regard to subparagraph (A)(ii).
                            ``(ii) Limitation.--The bonus depreciation 
                        amount for any taxable year shall not exceed 
                        the lesser of--
                                    ``(I) 50 percent of the minimum tax 
                                credit under section 53(b) for the 
                                first taxable year ending after 
                                December 31, 2011, reduced (but not 
                                below zero) by the sum of the bonus 
                                depreciation amounts for all taxable 
                                years ending after such date for which 
                                an election under this paragraph was 
                                made which precede the taxable year for 
                                which the determination is made (other 
                                than amounts determined with respect to 
                                property placed in service by the 
                                taxpayer on or before such date), or
                                    ``(II) the minimum tax credit under 
                                section 53(b) for such taxable year 
                                determined by taking into account only 
                                the adjusted minimum tax for taxable 
                                years ending before January 1, 2012 
                                (determined by treating credits as 
                                allowed on a first-in, first-out 
                                basis).
                            ``(iii) Aggregation rule.--All corporations 
                        which are treated as a single employer under 
                        section 52(a) shall be treated--
                                    ``(I) as 1 taxpayer for purposes of 
                                this paragraph, and
                                    ``(II) as having elected the 
                                application of this paragraph if any 
                                such corporation so elects.
                    ``(C) Eligible qualified property.--For purposes of 
                this paragraph, the term `eligible qualified property' 
                means qualified property under paragraph (2), except 
                that in applying paragraph (2) for purposes of this 
                paragraph--
                            ``(i) `March 31, 2008' shall be substituted 
                        for `December 31, 2007' each place it appears 
                        in subparagraph (A) and clauses (i) and (ii) of 
                        subparagraph (E) thereof,
                            ``(ii) `April 1, 2008' shall be substituted 
                        for `January 1, 2008' in subparagraph 
                        (A)(iii)(I) thereof, and
                            ``(iii) only adjusted basis attributable to 
                        manufacture, construction, or production--
                                    ``(I) after March 31, 2008, and 
                                before January 1, 2010, and
                                    ``(II) after December 31, 2010, and 
                                before January 1, 2013, shall be taken 
                                into account under subparagraph (B)(ii) 
                                thereof.
                    ``(D) Credit refundable.--For purposes of section 
                6401(b), the aggregate increase in the credits 
                allowable under part IV of subchapter A for any taxable 
                year resulting from the application of this paragraph 
                shall be treated as allowed under subpart C of such 
                part (and not any other subpart).
                    ``(E) Other rules.--
                            ``(i) Election.--Any election under this 
                        paragraph may be revoked only with the consent 
                        of the Secretary.
                            ``(ii) Partnerships with electing 
                        partners.--In the case of a corporation making 
                        an election under subparagraph (A) and which is 
                        a partner in a partnership, for purposes of 
                        determining such corporation's distributive 
                        share of partnership items under section 702--
                                    ``(I) paragraph (1) shall not apply 
                                to any eligible qualified property, and
                                    ``(II) the applicable depreciation 
                                method used under this section with 
                                respect to such property shall be the 
                                straight line method.
                            ``(iii) Certain partnerships.--In the case 
                        of a partnership in which more than 50 percent 
                        of the capital and profits interests are owned 
                        (directly or indirectly) at all times during 
                        the taxable year by one corporation (or by 
                        corporations treated as 1 taxpayer under 
                        subparagraph (B)(iii)), for purposes of 
                        subparagraph (B), each partner shall take into 
                        account its distributive share of the amounts 
                        determined by the partnership under subclauses 
                        (I) and (II) of clause (i) of such subparagraph 
                        for the taxable year of the partnership ending 
                        with or within the taxable year of the partner. 
                        The preceding sentence shall apply only to 
                        amounts determined with respect to property 
                        placed in service after December 31, 2011.
                            ``(iv) Special rule for passenger 
                        aircraft.--In the case of any passenger 
                        aircraft, the written binding contract 
                        limitation under paragraph (2)(A)(iii)(I) shall 
                        not apply for purposes of subparagraphs 
                        (B)(i)(I) and (C).''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years ending after December 31, 2011.
            (3) Transitional rule.--In the case of a taxable year 
        beginning before January 1, 2012, and ending after December 31, 
        2011, the bonus depreciation amount determined under paragraph 
        (4) of section 168(k) of the Internal Revenue Code of 1986 for 
        such year shall be the sum of--
                    (A) such amount determined under such paragraph as 
                in effect on the date before the date of enactment of 
                this Act--
                            (i) taking into account only property 
                        placed in service before January 1, 2012, and
                            (ii) multiplying the limitation under 
                        subparagraph (C)(ii) of such paragraph (as so 
                        in effect) by a fraction the numerator of which 
                        is the number of days in the taxable year 
                        before January 1, 2012, and the denominator of 
                        which is the number of days in the taxable 
                        year, and
                    (B) such amount determined under such paragraph as 
                amended by this Act--
                            (i) taking into account only property 
                        placed in service after December 31, 2011, and
                            (ii) multiplying the limitation under 
                        subparagraph (B)(ii) of such paragraph (as so 
                        in effect) by a fraction the numerator of which 
                        is the number of days in the taxable year after 
                        December 31, 2011, and the denominator of which 
                        is the number of days in the taxable year.
                                                       Calendar No. 341

112th CONGRESS

  2d Session

                                S. 2237

_______________________________________________________________________

                                 A BILL

  To provide a temporary income tax credit for increased payroll and 
    extend bonus depreciation for an additional year, and for other 
                               purposes.

_______________________________________________________________________

                             March 27, 2012

            Read the second time and placed on the calendar