[Congressional Record Volume 155, Number 192 (Thursday, December 17, 2009)]
[Senate]
[Pages S13388-S13390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. INOUYE:
  S. 2905. A bill to amend the Internal Revenue Code of 1986 to repeal 
the reduction in the deductible portion of expenses for business meals 
and entertainment; to the Committee on Finance.
  Mr. INOUYE. Mr. President, today I rise to introduce legislation to 
repeal the current 50 percent tax deduction for business meals and 
entertainment expenses, and to restore the tax deduction to 80 percent 
for all taxpayers. In 1986, the Congress reduced the allowable tax 
deduction for business meals and entertainment from 100 percent to 80 
percent. In 1993, the Congress again reduced the deduction to 50 
percent. Restoration of this deduction is essential to the livelihood 
of small and independent businesses as well as the food service, 
travel, tourism, and entertainment industries throughout the United 
States. These industries are being economically harmed as a result of 
the 50 percent tax deduction.
  At a time when the nation is getting back on a stronger economic 
footing, the legislation is particularly critical especially for the 
small businesses and self-employed individuals that depend so heavily 
on the business meal to conduct business. Small companies often use 
restaurants as ``conference space'' to conduct meetings or close deals. 
Meals are their best, and sometimes only, marketing tool. Certainly, an 
increase in the meal and entertainment deduction would have a 
significant impact on a small businesses bottom line. In addition, the 
effects on the overall economy would be significant.
  Accompanying my statement is the National Restaurant Association's, 
NRA, State-by-State chart reflecting the estimated economic impact of 
increasing the business meal deductibility from 50 percent to 80 
percent. The NRA estimates that an increase to 80 percent would 
increase business meal sales by $6 billion and create an $18 billion 
increase to the overall economy.
  I urge my colleagues to join me in cosponsoring this important 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill and 
a State-by-State chart be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2905

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

     SECTION 1. REPEAL OF REDUCTION IN BUSINESS MEALS AND 
                   ENTERTAINMENT TAX DEDUCTION.

       (a) In General.--Section 274(n)(1) of the Internal Revenue 
     Code of 1986 (relating to only 50 percent of meal and 
     entertainment expenses allowed as deduction) is amended by 
     striking ``50 percent'' and inserting ``80 percent''.
       (b) Conforming Amendment.--Section 274(n) of the Internal 
     Revenue Code of 1986 is amended by striking paragraph (3).
       (c) Clerical Amendment.--The heading for section 274(n) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``Only 50 Percent'' and inserting ``Portion''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.
                                  ____


                   ESTIMATED IMPACT OF INCREASING BUSINESS MEAL DEDUCTIBILITY FROM 50% TO 80%
----------------------------------------------------------------------------------------------------------------
                                                            Increase in
                                                           Business Meal      Total Economic    Total Employment
                         State                            Spending 50% to     Impact In the      Impact In the
                                                         80% Deductibility     State   (in      State (number of
                                                            (in millions)       millions)        jobs created)
----------------------------------------------------------------------------------------------------------------
Alabama................................................                $77               $155             $2,464
Alaska.................................................                 17                 29                401
Arizona................................................                118                235              3,125
Arkansas...............................................                 43                 87              1,451
California.............................................                767              1,797             20,868
Colorado...............................................                114                264              3,328
Connecticut............................................                 71                133              1,624
Delaware...............................................                 19                 35                402
District of Columbia...................................                 31                 43                254
Florida................................................                368                745              9,746
Georgia................................................                193                446              5,642
Hawaii.................................................                 44                 86              1,154
Idaho..................................................                 24                 47                799
Illinois...............................................                256                610              7,207
Indiana................................................                117                241              3,712
Iowa...................................................                 47                 95              1,544
Kansas.................................................                 46                 92              1,314
Kentucky...............................................                 78                158              2,266
Louisiana..............................................                 81                158              2,374
Maine..................................................                 24                 46                709
Maryland...............................................                113                235              2,750
Massachusetts..........................................                161                324              3,884
Michigan...............................................                171                341              5,272
Minnesota..............................................                105                240              3,270

[[Page S13390]]

 
Mississippi............................................                 41                 78              1,340
Missouri...............................................                115                256              3,512
Montana................................................                 20                 39                682
Nebraska...............................................                 31                 64              1,048
Nevada.................................................                 71                127              1,703
New Hampshire..........................................                 29                 53                653
New Jersey.............................................                170                367              4,139
New Mexico.............................................                 37                 66              1,079
New York...............................................                379                751              8,855
North Carolina.........................................                176                371              5,435
North Dakota...........................................                 11                 20                333
Ohio...................................................                217                466              6,978
Oklahoma...............................................                 60                127              2,016
Oregon.................................................                 82                169              2,274
Pennsylvania...........................................                212                478              6,311
Rhode Island...........................................                 24                 45                598
South Carolina.........................................                 87                179              2,689
South Dakota...........................................                 14                 27                458
Tennessee..............................................                121                272              3,531
Texas..................................................                477              1,164             14,109
Utah...................................................                 41                 92              1,375
Vermont................................................                 11                 19                288
Virginia...............................................                157                331              4,155
Washington.............................................                129                279              3,419
West Virginia..........................................                 28                 47                830
Wisconsin..............................................                100                210              3,399
Wyoming................................................                 10                 16                293
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Source: National Restaurant Association estimates, 2009.

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