Section 1 Short title
This Act may be cited as the “Small Business Tax Certainty and Growth Act of 2013”.
Small Business Tax Certainty and Growth Act of 2013
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives for small businesses.
Sec. 2 Sense of the Senate regarding tax reform
Sec. 3 Permanent doubling of deductions for start-up expenses, organizational expenses, and syndication fees
Start-Up expenses—
In general— Clause (ii) of section 195(b)(1)(A) of the Internal Revenue Code of 1986 is amended—
by striking “$5,000” and inserting “$10,000”, and
by striking “$50,000” and inserting “$60,000”.
Conforming amendment— Subsection (b) of section 195 of the Internal Revenue Code of 1986 is amended by striking paragraph (3).
Organizational expenses— Subparagraph (B) of section 248 of the Internal Revenue Code of 1986 is amended—
by striking “$5,000” and inserting “$10,000”, and
by striking “$50,000” and inserting “$60,000”.
Organization and syndication fees— Clause (ii) of section 709(b)(1)(A) of the Internal Revenue Code of 1986 is amended—
by striking “$5,000” and inserting “$10,000”, and
by striking “$50,000” and inserting “$60,000”.
Effective date— The amendments made by this section shall apply to amounts paid or incurred in taxable years ending on or after the date of the enactment of this Act.
Sec. 4 Clarification of cash accounting rules for small business
Cash accounting permitted—
In general— Section 446 of the Internal Revenue Code of 1986 (relating to general rule for methods of accounting) is amended by adding at the end the following new subsection:
“(g) Certain small business taxpayers permitted To use cash accounting method without limitation
“(1) In general—An eligible taxpayer shall not be required to use an accrual method of accounting for any taxable year.
“(2) Eligible taxpayer—For purposes of this subsection, a taxpayer is an eligible taxpayer with respect to any taxable year if—
“(A) for all prior taxable years beginning after December 31, 2013, the taxpayer (or any predecessor) met the gross receipts test of section 448(c), and
“(B) the taxpayer is not subject to section 447 or 448.”
Expansion of gross receipts test—
In general— Paragraph (3) of section 448(b) of such Code (relating to entities with gross receipts of not more than $5,000,000) is amended by striking “$5,000,000” in the text and in the heading and inserting “$10,000,000”.
Conforming amendments— Section 448(c) of such Code is amended—
by striking “$5,000,000” each place it appears in the text and in the heading of paragraph (1) and inserting “$10,000,000”, and
by adding at the end the following new paragraph:
“(4) Inflation adjustment—In the case of any taxable year beginning in a calendar year after 2014, the dollar amount contained in subsection (b)(3) and paragraph (1) of this subsection shall be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.”
Clarification of inventory rules for small business—
In general— Section 471 of the Internal Revenue Code of 1986 (relating to general rule for inventories) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
“(c) Small business taxpayers not required To use inventories
“(1) In general—A qualified taxpayer shall not be required to use inventories under this section for a taxable year.
“(2) Treatment of taxpayers not using inventories—If a qualified taxpayer does not use inventories with respect to any property for any taxable year beginning after December 31, 2013, such property shall be treated as a material or supply which is not incidental.
“(3) Qualified taxpayer—For purposes of this subsection, the term qualified taxpayer means—
“(A) any eligible taxpayer (as defined in section 446(g)(2)), and
“(B) any taxpayer described in section 448(b)(3).”
Increased eligibility for simplified dollar-value LIFO method— Section 474(c) is amended by striking “$5,000,000” and inserting “the dollar amount in effect under section 448(c)(1)”.
Effective date and special rules—
In general— The amendments made by this section shall apply to taxable years beginning after December 31, 2013.
Change in method of accounting— In the case of any taxpayer changing the taxpayer’s method of accounting for any taxable year under the amendments made by this section—
such change shall be treated as initiated by the taxpayer;
such change shall be treated as made with the consent of the Secretary of the Treasury; and
the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period (not greater than 4 taxable years) beginning with such taxable year.
Sec. 5 Permanent extension of expensing limitation
Dollar limitation— Section 179(b)(1) of the Internal Revenue Code of 1986 is amended by striking “shall not exceed” and all that follows and inserting “shall not exceed $250,000.”.
Reduction in limitation— Section 179(b)(2) of such Code is amended by striking “exceeds” and all that follows and inserting “exceeds $800,000.”.
Inflation adjustment— Subsection (b) of section 179 of such Code is amended by adding at the end the following new paragraph:
“(6) Inflation adjustment
“(A) In general—In the case of any taxable year beginning in a calendar year after 2014, the $250,000 in paragraph (1) and the $800,000 amount in paragraph (2) shall each be increased by an amount equal to—
“(i) such dollar amount, multiplied by
“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.
“(B) Rounding
“(i) Dollar limitation—If the amount in paragraph (1) as increased under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.
“(ii) Phaseout amount—If the amount in paragraph (2) as increased under subparagraph (A) is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.”
Computer software— Section 179(d)(1)(A)(ii) of such Code is amended by striking “and before 2014”.
Election— Section 179(c)(2) of such Code is amended by striking “and before 2014”.
Special rules for treatment of qualified real property—
In general— Section 179(f)(1) of such Code is amended by striking “beginning in 2010, 2011, 2012, or 2013” and inserting “beginning after 2009”.
Conforming amendment— Section 179(f) of such Code is amended by striking paragraph (4).
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2013.
Sec. 6 Extension of bonus depreciation
In general— Paragraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended—
by striking “January 1, 2015” in subparagraph (A)(iv) and inserting “January 1, 2016”, and
by striking “January 1, 2014” each place it appears and inserting “January 1, 2015”.
Special rule for Federal long-Term contracts— Clause (ii) of section 460(c)(6)(B) of the Internal Revenue Code of 1986 is amended by striking “January 1, 2014 (January 1, 2015” and inserting “January 1, 2015 (January 1, 2016”.
Conforming Amendments—
The heading for subsection (k) of section 168 of the Internal Revenue Code of 1986 is amended by striking “January 1, 2014” and inserting “January 1, 2015”.
The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking “Pre-january 1, 2014” and inserting “Pre-january 1, 2015”.
Section 168(k)(4)(D) is amended by striking “and” at the end of clause (ii), by striking the period at the end of clause (iii) and inserting a comma, and by adding at the end the following new clauses:
“(iv) “January 1, 2015” shall be substituted for “January 1, 2016” in subparagraph (A)(iv) thereof, and
“(v) “January 1, 2014” shall be substituted for “January 1, 2015” each place it appears in subparagraph (A) thereof.”
Section 168(l)(4) of such Code is amended by striking “and” at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph:
“(B) by substituting “January 1, 2014” for “January 1, 2015” in clause (i) thereof, and”
Subparagraph (C) of section 168(n)(2) of such Code is amended by striking “January 1, 2014” and inserting “January 1, 2015”.
Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking “January 1, 2014” and inserting “January 1, 2015”.
Subparagraph (B) of section 1400N(d)(3) of such Code is amended by striking “January 1, 2014” and inserting “January 1, 2015”.
Effective date— The amendments made by this section shall apply to property placed in service after December 31, 2013, in taxable years ending after such date.
Sec. 7 Extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
In General— Clauses (iv), (v), and (ix) of section 168(e)(3)(E) of the Internal Revenue Code of 1986 are each amended by striking “January 1, 2014” and inserting “January 1, 2015”.
Effective Date— The amendments made by this section shall apply to property placed in service after December 31, 2013.