Small Business Growth in Manufacturing Act of 2014

Summary: Small Business Growth in Manufacturing Act of 2014 - Amends the Internal Revenue Code to: (1) allow small business employers a business-related tax credit for up to 50% of qualified employee training expenses in a taxable year, (2) make permanent the tax credit for increasing research expenditures, and (3) increase the rate of the alternative simplified research tax credit. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Growth in 
Manufacturing Act of 2014''.

SEC. 2. CREDIT FOR ON-THE-JOB TRAINING.

    (a) 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:

``SEC. 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.''.
    (b) 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).''.
    (c) 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,''.
    (d) Technical Amendment.--Section 6501(m) of such Code is amended 
by inserting ``45S(e),'' after ``45H(g),''.
    (e) 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:

``Sec. 45S. On-the-job training credit.''.
    (f) Effective Dates.--
            (1) 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.
            (2) 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.

    (a) Research Credit Made Permanent.--
            (1) In general.--Section 41 of the Internal Revenue Code of 
        1986 is amended by striking subsection (h).
            (2) Conforming amendments.--
                    (A) Subsection (c) of section 41 of such Code is 
                amended by striking paragraph (4).
                    (B) Paragraph (1) of section 45C(b) of such Code is 
                amended by striking subparagraph (D).
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts paid or incurred after December 31, 
        2013.
    (b) Increase in Alternative Simplified Research Credit.--
            (1) 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''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years ending after the date of the 
        enactment of this Act.