[Congressional Record Volume 157, Number 60 (Thursday, May 5, 2011)]
[Senate]
[Pages S2743-S2744]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. INOUYE:
  S. 907. 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 
restore the 80 percent tax deduction for business meals and 
entertainment expenses.
  By way of background, business meals previously were fully 
deductible. In 1986, the Congress reduced the allowable tax deduction 
for business meals and entertainment from 100 percent to 80 percent. In 
1993, the deduction was further reduced to its current level of 50 
percent. The business meal deduction should be reformed to better 
reflect the basic principle that business expenses should be fully 
deductible. Increasing the limitation to 80 percent would better align 
the provision with these objectives.
  More importantly, at a time when the Nation is getting back on 
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 business's bottom 
line.
  In addition, the effects on the overall economy would be significant. 
Research has shown that increasing the business meal deduction to 80 
percent would increase business meal sales by over $7 billion and 
increase the number of jobs by over 200,000. Moreover, restaurants 
service more than 130 million guests every day. Every dollar spent 
dining out generates $2.05 in business to other industries, totaling 
more than $1.7 trillion in overall economic impact.
  The impact of the restaurant industry on the Nation's economy is 
considerable and felt in every State. Accompanying my statement is the 
National Restaurant Association's, NRA's, State-by-State chart 
reflecting the estimated economic impact of increasing the business 
meal deductibility from 50 percent to 80 percent.
  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. 907

       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, 
     2011.

[[Page S2744]]


 ESTIMATED IMPACT OF INCREASING BUSINESS MEAL DEDUCTIBILITY FROM 50% TO
                                   80%
------------------------------------------------------------------------
                                                                 Total
                                     Increase in     Total    employment
                                    business meal   economic   impact in
               State                spending  50%  impact in   the State
                                        to 80%     the State  (number of
                                    deductibility      (in       jobs
                                    (in millions)  millions)   created)
------------------------------------------------------------------------
Alabama...........................         $92         $186       2,952
Alaska............................          19           33         452
Arizona...........................         151          300       3,984
Arkansas..........................          50          101       1,689
California........................         967        2,267      26,315
Colorado..........................         136          313       3,943
Connecticut.......................          88          165       2,019
Delaware..........................          24           43         499
District of Columbia..............          39           53         313
Florida...........................         472          957      12,522
Georgia...........................         230          532       6,732
Hawaii............................          54          104       1,402
Idaho.............................          28           55         933
Illinois..........................         313          744       8,786
Indiana...........................         135          278       4,272
Iowa..............................          51          102       1,669
Kansas............................          56          112       1,606
Kentucky..........................          90          183       2,618
Louisiana.........................          98          193       2,888
Maine.............................          29           55         848
Maryland..........................         148          307       3,594
Massachusetts.....................         193          388       4,649
Michigan..........................         191          380       5,872
Minnesota.........................         119          272       3,714
Mississippi.......................          50           95       1,630
Missouri..........................         134          298       4,084
Montana...........................          21           40         710
Nebraska..........................          35           73       1,190
Nevada............................          83          147       1,974
New Hampshire.....................          34           63         784
New Jersey........................         205          442       4,993
New Mexico........................          45           82       1,331
New York..........................         482          954      11,251
North Carolina....................         222          467       6,849
North Dakota......................          12           22         373
Ohio..............................         252          540       8,081
Oklahoma..........................          74          157       2,491
Oregon............................          94          194       2,611
Pennsylvania......................         258          582       7,688
Rhode Island......................          29           53         706
South Carolina....................         108          221       3,329
South Dakota......................          15           30         509
Tennessee.........................         143          322       4,191
Texas.............................         576        1,405      17,036
Utah..............................          50          113       1,682
Vermont...........................          13           22         335
Virginia..........................         200          423       5,312
Washington........................         157          340       4,160
West Virginia.....................          32           54         950
Wisconsin.........................         107          224       3,629
Wyoming...........................          12           19         346
------------------------------------------------------------------------
Source: National Restaurant Association estimates, 2011

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