S.Amdt. 1691

SA 1691. Mr. JOHNSON (for himself and Mr. Graham) submitted an
amendment intended to be proposed to amendment SA 1618 proposed by Mr.
McConnell (for Mr. Hatch (for himself and Ms. Murkowski)) to the bill
H.R. 1, to provide for reconciliation pursuant to titles II and V of
the concurrent resolution on the budget for fiscal year 2018; which was
ordered to lie on the table; as follows:

At the end of part V of subtitle A of title I, insert the
following:

SEC. 11052. SUSPENSION OF CORPORATE DEDUCTION FOR STATE AND
LOCAL INCOME TAXES.

(a) Corporate State and Local Income Taxes.--
(1) In general. Paragraph (6) of section 164(b), as added
by section 11042(a) of this Act, is amended--

[[Page S7590]]

(A) in the heading, by striking ``INDIVIDUAL'',
(B) in the matter preceding subparagraph (A), by striking
``an individual and'', and
(C) in subparagraph (A)--
(1) by inserting ``in the ease of all individual,'' before
``paragraphs (1) and (2)'', and
(ii) by striking ``and'' at the end,
(D) in subparagraph (B), by striking the period and
inserting ``, and'', and
(E) by adding at the end the following new subparagraph:
``(C) in the case of a corporation, the second sentence of
subsection (a) shall not apply.''.
(2) Trade or business expense.--Section 162, as amended by
sections 13307, 13308, and 13531 of this Act, is amended by
redesignating subsection (t) as subsection (u) and by
inserting after subsection (s) the following new subsection:
``(t) Suspension of Deduction for State and Local Taxes.--
--In the case of a corporation and a taxable year beginning
after December 31, 2017, and before January 1, 2026, no
deduction otherwise allowable under this section shall be
allowed for any State or local income, war profits, and
excess profits taxes (as described in section 164(a)(3)).''.
(3) Effective date.--The amendments made by this subsection
shall take effect as if included in the amendment made by
section 11042(a) of this Act.
(b) Increase in Rate for Deduction for Qualified Business
Income of Pass-thru Entities.--
(1) In general.--Section 199A of the Internal Revenue Code
of 1986, as added by section 11011 of this Act, is amended--
(A) in paragraph (2) of subsection (a), by striking ``17.4
percent'' and inserting ``the applicable percentage (as
determined under subsection (g))'', and
(B) in paragraphs (1)(B) and (2)(A) of subsection (b), by
striking ``17.4 percent'' each place it appears and inserting
``the applicable percentage (as determined under subsection
(g))''.
(2) Applicable percentage.--Section 199A of the Internal
Revenue Code of 1986, as added by section 11011 of this Act,
is amended--
(A) by redesignating subsection (g) as subsection (h), and
(B) by inserting after subsection (f) the following new
subsection:
``(g) Applicable Percentage.--
``(1) In general.--For purposes of this section, the
applicable percentage shall be equal to the sum of 17.4
percent plus the additional percentage (as determined under
paragraph (2)).
``(2) Additional percentage.--The additional percentage
shall be the amount (expressed as a percentage) which is
determined by the Secretary to permit an increase in the
deduction allowed under this section in an amount equal to
the increase in revenue resulting from the amendments made by
subsection (a) of section 11052 of the Tax Cuts and Jobs
Act.''.
(3) Effective date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2017.
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