Section 1 Short title
This Act may be cited as the “Small Business Growth in Manufacturing Act of 2014”.
Small Business Growth in Manufacturing Act of 2014
A BILL
To amend the Internal Revenue Code of 1986 to allow small employers a credit against income tax for the cost of on-the-job training expenses, to make the research credit permanent, and to increase the simplified research credit.
Sec. 2 Credit for on-the-job training
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“45S. On-the-job training credit
“(a) In general—For the purposes of section 38, in the case of a small business employer, the job training credit determined under this section for the taxable year is an amount equal to 50 percent of the qualified training expenses paid or incurred by the taxpayer during the taxable year.
“(b) Limitations
“(1) In general—The credit allowed under subsection (a) with respect to any eligible trainee shall not exceed the excess (if any) of $5,000 over the aggregate credit allowed to such taxpayer under this section with respect to such eligible trainee for all prior taxable years.
“(2) 3-year limitation on expenses per trainee—Qualified training expenses may be taken into account under this section with respect to any eligible trainee only during the 3-year period beginning on the date that such expenses were first incurred by the taxpayer with respect to such trainee.
“(c) Small business employer—For purposes of this section—
“(1) In general—The term small business employer means any employer if such employer employed an average of 500 or fewer employees on business days during the most recent calendar year ending before the beginning of the taxable year. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the employer was in existence throughout such year.
“(2) Employers not in existence in preceding year—In the case of an employer which was not in existence throughout the calendar year otherwise taken into account under paragraph (1), the determination under paragraph (1) shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
“(d) Definitions—For purposes of this section—
“(1) Qualified training expenses—The term qualified training expenses means amounts paid or incurred to an unrelated party for—
“(A) the purchase or use of instructional materials and equipment used exclusively for the training of eligible trainees,
“(B) the use of classroom or other space so used, and
“(C) teachers, trainers, and consultants engaged in carrying out such training program.
“(2) Eligible trainee—The term eligible trainee means any employee of the taxpayer who performs services for the employer for at least 30 hours per week while receiving the training for which the qualified training expenses are incurred.
“(e) Special rules
“(1) Denial of double benefit—No deduction shall be allowed for that portion of the qualified training expenses (otherwise allowable as a deduction for the taxable year) which is equal to the amount of the credit determined for such taxable year under this section.
“(2) Aggregation—For purposes of this section, all persons treated as a single employer under subsection (a) or (b) or section 52, or subsection (m) or (o) of section 414, shall be treated as one person.
“(f) Election To have credit not apply—A taxpayer may elect (at such time and in such manner as the Secretary may by regulations prescribe) to have this section not apply for any taxable year.”
Credit To be part of general business credit— Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking “plus” at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting “, plus”, and by adding at the end the following new paragraph:
“(37) in the case of a small business employer (as defined in section 45S(c)), the job training credit determined under section 45S(a).”
Credit allowed against alternative minimum tax— Section 38(c)(4)(B) of such Code is amended by redesignating clauses (vii), (viii), and (ix) as clauses (viii), (ix), and (x), respectively, and by inserting after clause (vi) the following new clause:
“(vii) the credit determined under section 45S,”
Technical amendment— Section 6501(m) of such Code is amended by inserting “45S(e),” after “45H(g),”.
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
Effective dates—
In general— The amendments made by this section shall apply to expenses paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.
Minimum tax— The amendment made by subsection (c) shall apply to credits determined under section 45S of the Internal Revenue Code of 1986 in taxable years ending after the date of the enactment of this Act, and to carrybacks of such credits.
Sec. 3 Research credit made permanent; increase in alternative simplified research credit
Research credit made permanent—
In general— Section 41 of the Internal Revenue Code of 1986 is amended by striking subsection (h).
Conforming amendments—
Subsection (c) of section 41 of such Code is amended by striking paragraph (4).
Paragraph (1) of section 45C(b) of such Code is amended by striking subparagraph (D).
Effective date— The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2013.
Increase in alternative simplified research credit—
In general— Subparagraph (A) of section 41(c)(5) of such Code (relating to election of alternative simplified credit) is amended by striking “14 percent (12 percent in the case of taxable years ending before January 1, 2009)” and inserting “20 percent”.
Effective date— The amendment made by this subsection shall apply to taxable years ending after the date of the enactment of this Act.