[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 664 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 664
To amend the Internal Revenue Code of 1986 to permanently extend the
research credit, to increase the rates of the alternative incremental
credit, and to provide an alternative simplified credit for qualified
research expenses.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 19, 2003
Mr. Hatch (for himself, Mr. Baucus, Mr. Grassley, Mr. Rockefeller, Mr.
Smith, Mr. Daschle, Mr. Kyl, Mrs. Lincoln, Mr. Thomas, Mr.
Kerry, Mr. Bunning, Mrs. Feinstein, Mr. Allen, Mrs. Boxer, Mr.
Cochran, Mr. Lieberman, Mrs. Hutchison, Ms. Stabenow, Mr.
Ensign, Mr. Bayh, Mr. Allard, Mr. Miller, and Ms. Cantwell)
introduced the following bill; which was read twice and
referred to the Committee on FinanceYYYYYYYYYYYYYYYYYYYYYYYYYYY
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to permanently extend the
research credit, to increase the rates of the alternative incremental
credit, and to provide an alternative simplified credit for qualified
research expenses.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Investment in America Act of 2003''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Research and development performed in the United States
results in quality jobs, better and safer products, increased
ownership of technology-based intellectual property, and higher
productivity in the United States.
(2) The extent to which companies perform and increase
research and development activities in the United States is in
part dependent on Federal tax policy.
(3) Congress should make permanent a research and
development credit that provides a meaningful incentive to all
types of taxpayers.
SEC. 3. PERMANENT EXTENSION OF RESEARCH CREDIT.
(a) In General.--Section 41 of the Internal Revenue Code of 1986
(relating to credit for increasing research activities) is amended by
striking subsection (h).
(b) Conforming Amendment.--Paragraph (1) of section 45C(b) of such
Code is amended by striking subparagraph (D).
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after the date of the enactment of
this Act.
SEC. 4. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL CREDIT.
(a) In General.--Subparagraph (A) of section 41(c)(4) of the
Internal Revenue Code of 1986 (relating to election of alternative
incremental credit) is amended--
(1) by striking ``2.65 percent'' and inserting ``3
percent'',
(2) by striking ``3.2 percent'' and inserting ``4
percent'', and
(3) by striking ``3.75 percent'' and inserting ``5
percent''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after the date of the enactment of this Act.
SEC. 5. ALTERNATIVE SIMPLIFIED CREDIT FOR QUALIFIED RESEARCH EXPENSES.
(a) In General.--Subsection (c) of section 41 of the Internal
Revenue Code of 1986 (relating to base amount) is amended by
redesignating paragraphs (5) and (6) as paragraphs (6) and (7),
respectively, and by inserting after paragraph (4) the following new
paragraph:
``(5) Election of alternative simplified credit.--
``(A) In general.--At the election of the taxpayer,
the credit determined under subsection (a)(1) shall be
equal to 12 percent of so much of the qualified
research expenses for the taxable year as exceeds 50
percent of the average qualified research expenses for
the 3 taxable years preceding the taxable year for
which the credit is being determined.
``(B) Special rule in case of no qualified research
expenses in any of 3 preceding taxable years.--
``(i) Taxpayers to which subparagraph
applies.--The credit under this paragraph shall
be determined under this subparagraph if the
taxpayer has no qualified research expenses in
any 1 of the 3 taxable years preceding the
taxable year for which the credit is being
determined.
``(ii) Credit rate.--The credit determined
under this subparagraph shall be equal to 6
percent of the qualified research expenses for
the taxable year.
``(C) Election.--An election under this paragraph
shall apply to the taxable year for which made and all
succeeding taxable years unless revoked with the
consent of the Secretary. An election under this
paragraph may not be made for any taxable year to which
an election under paragraph (4) applies.''
(b) Coordination With Election of Alternative Incremental Credit.--
(1) In general.--Section 41(c)(4)(B) of the Internal
Revenue Code of 1986 (relating to election) is amended by
adding at the end the following: ``An election under this
paragraph may not be made for any taxable year to which an
election under paragraph (5) applies.''
(2) Transition rule.--In the case of an election under
section 41(c)(4) of the Internal Revenue Code of 1986 which
applies to the taxable year which includes the date of the
enactment of this Act, such election shall be treated as
revoked with the consent of the Secretary of the Treasury if
the taxpayer makes an election under section 41(c)(5) of such
Code (as added by subsection (a)) for such year.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
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