[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2237 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2237

To amend the Internal Revenue Code of 1986 to provide an elective safe 
harbor for the expensing by small businesses of the costs of acquiring 
                    or producing tangible property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 10, 2014

  Mr. Hoeven (for himself and Ms. Cantwell) 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 an elective safe 
harbor for the expensing by small businesses of the costs of acquiring 
                    or producing tangible property.

    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 ``Farm and Small Business Expensing 
Tax Relief Act''.

SEC. 2. SAFE HARBOR FOR EXPENSING BY SMALL BUSINESSES OF ACQUISITION OR 
              PRODUCTION COSTS OF TANGIBLE PROPERTY.

    (a) In General.--Section 263 of the Internal Revenue Code of 1986 
is amended by adding at the end the following:
    ``(j) Election for Small Businesses To Expense Certain Acquisition 
and Production Costs.--
            ``(1) In general.--If the amount paid or incurred by an 
        eligible taxpayer to acquire or produce any item of tangible 
        property does not exceed $5,000 (or such higher amount as the 
        Secretary may prescribe by regulations), then, notwithstanding 
        subsection (a), the taxpayer may elect to treat such amount as 
        an expense which is not chargeable to capital account nor 
        treated as a material or supply. Any amount so treated shall be 
        allowed as a deduction for the taxable year in which the 
        property is acquired or produced.
            ``(2) Eligible taxpayer.--For purposes of this subsection--
                    ``(A) In general.--The term `eligible taxpayer' 
                means, with respect to any taxable year, a taxpayer--
                            ``(i) who meets the gross receipts test of 
                        subparagraph (B) for the taxable year, and
                            ``(ii) who, as of the beginning of the 
                        taxable year, has in effect written accounting 
                        procedures meeting such requirements as the 
                        Secretary may prescribe with respect to the 
                        expensing of amounts described in paragraph 
                        (1).
                    ``(B) Gross receipts test.--A taxpayer meets the 
                gross receipts test of this subparagraph for any 
                taxable year if the average annual gross receipts of 
                such taxpayer for the 3-taxable-year period ending with 
                the taxable year which precedes such taxable year does 
                not exceed $10,000,000.
                    ``(C) Rules relating to gross receipts test.--For 
                purposes of subparagraph (B)--
                            ``(i) the rules of paragraphs (2) and (3) 
                        of section 448(c) shall apply, and
                            ``(ii) in the case of a partnership, S 
                        corporation, trust, estate, or other pass-thru 
                        entity, the gross receipts test shall apply at 
                        the entity level.
            ``(3) Election.--Any election under this subsection for any 
        taxable year shall--
                    ``(A) specify the items of tangible property to 
                which the election applies, and
                    ``(B) be made, in such manner as the Secretary may 
                prescribe, on the taxpayer's return of the tax imposed 
                by this chapter for the taxable year.
        Any election made under this subsection, and any specification 
        made in any such election, may not be revoked except with the 
        consent of the Secretary.
            ``(4) Coordination with section 179.--This subsection shall 
        be applied before section 179.
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as are necessary to carry out the purposes of this 
        subsection, including regulations providing for--
                    ``(A) exceptions for property which is inventory or 
                land or for which the taxpayer makes an election for 
                optional treatment under section 162; and
                    ``(B) the aggregation of all amounts paid or 
                incurred with respect to any item of tangible property.
            ``(6) Rule of construction.--If, for any taxable year, a 
        taxpayer is not an eligible taxpayer (or is an eligible 
        taxpayer who does not elect to have this subsection apply), 
        nothing in this subsection shall be construed as prohibiting 
        the expensing of any amount paid or incurred during the taxable 
        year to acquire or produce any item of tangible property if 
        such expensing is permitted under any safe harbor or other 
        provision of the regulations prescribed under this section.
            ``(7) Cross reference.--For capitalization of certain 
        expenses where a taxpayer produces property or acquires 
        property for resale, see section 263A.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred in taxable years beginning after December 
31, 2013.
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