To amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax on corporations and individuals.

Summary: Alternative Minimum Tax Repeal Act of 2003 - Amends the Internal Revenue Code to prohibit the imposition of the alternative minimum tax on: (1) corporations beginning January 1, 2003; and (2) individuals beginning January 1, 2013.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Alternative Minimum Tax Repeal Act 
of 2003''.

SEC. 2. REPEAL OF ALTERNATIVE MINIMUM TAX ON CORPORATIONS.

    (a) In General.--Subsection (a) of section 55 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
sentence:
``No tax shall be imposed by this section on any corporation for any 
taxable year beginning after December 31, 2002, and the tentative 
minimum tax of any corporation for any such taxable year shall be zero 
for purposes of this title.''
    (b) Limitation on Use of Credit for Prior Year Minimum Tax 
Liability.--Subsection (c) of section 53 of such Code is amended to 
read as follows:
    ``(c) Limitation.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the credit allowable under subsection (a) for any 
        taxable year shall not exceed the excess (if any) of--
                    ``(A) the regular tax liability of the taxpayer for 
                such taxable year reduced by the sum of the credits 
                allowable under subparts A, B, D, E, and F of this 
                part, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
            ``(2) Corporations.--In the case of corporation for any 
        taxable year beginning after December 31, 2002, the limitation 
        under paragraph (1) shall be determined--
                    ``(A) without regard to the last sentence of 
                section 55(a), and
                    ``(B) by taking into account only the applicable 
                percentage of the tentative minimum tax determined in 
                accordance with the following table.

        ``For taxable years beginning
                                                         The applicable
          in calendar year--
                                                        percentage is--
            2003...........................................      80    
            2004...........................................      60    
            2005...........................................      40    
            2006...........................................      20    
            2007 or thereafter.............................   0.''.    
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.

SEC. 3. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDIVIDUALS.

    (a) Repeal in 2011.--Subsection (a) of section 55 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
flush sentence:
``For purposes of this title, the tentative minimum tax on any taxpayer 
other than a corporation for any taxable year beginning after December 
31, 2012, shall be zero.''.
    (b) Reduction of Tax on Individuals Prior to Repeal.--
            (1) Immediate increase in exemption amounts.--Paragraph (1) 
        of section 55(d) of such Code is amended--
                    (A) by striking ``$45,000 ($49,000 in the case of 
                taxable years beginning in 2001, 2002, 2003, and 
                2004)'' and inserting ``$52,000'',
                    (B) by striking ``$33,750 ($37,750 in the case of 
                taxable years beginning in 2001, 2002, 2003, and 
                2004)'' and inserting ``$38,000'', and
                    (C) by striking ``$22,500'' and inserting ``\1/2\ 
                the amount applicable under subparagraph (A)''.
            (2) Additional increases in exemption amounts; repeal of 
        phase-out of exemption amounts.--Paragraph (3) of section 55(d) 
        of such Code is amended to read as follows:
            ``(3) Increases in exemption amounts for taxpayers other 
        than corporations.--
                    ``(A) In general.--The exemption amounts under 
                paragraph (1) for taxable years beginning in any 
                calendar year after 2003 shall be determined by 
                increasing the dollar amounts contained in 
                subparagraphs (A) and (B) of paragraph (1) by the 
                applicable percentage for such calendar year of such 
                dollar amounts.
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage shall be 
                determined in accordance with the following table:

                ``For calendar year--
                                                         The applicable
                  
                                                        percentage is--
                    2004...................................         10 
                    2005...................................         20 
                    2006...................................         30 
                    2007...................................         40 
                    2008...................................         50 
                    2009...................................         60 
                    2010...................................         70 
                    2011...................................         80 
                    2012...................................         90.
                    ``(C) Rounding.--If any amount, as increased under 
                subparagraph (A) is not a multiple of $5, such amount 
                shall be increased to the nearest multiple of $5.''
    (c) Nonrefundable Personal Credits Fully Allowed Against Regular 
Tax Liability.--
            (1) In general.--Subsection (a) of section 26 of such Code 
        (relating to limitation based on amount of tax) is amended to 
        read as follows:
    ``(a) Limitation Based on Amount of Tax.--The aggregate amount of 
credits allowed by this subpart for the taxable year shall not exceed 
the sum of--
            ``(1) the taxpayer's regular tax liability for the taxable 
        year reduced by the foreign tax credit allowable under section 
        27(a), and
            ``(2) the tax imposed by section 55(a) for the taxable 
        year.''.
            (2) Conforming amendment.--Section 904 of such Code is 
        amended by striking subsection (h).
    (d) Limitation on Use of Credit for Prior Year Minimum Tax 
Liability.--Subsection (c) of section 53 of such Code, as amended by 
section 1, is amended by adding at the end the following new paragraph:
            ``(3) Individuals for taxable years beginning after 2012.--
        In the case of any taxable year beginning after 2012, the 
        credit allowable under subsection (a) to a taxpayer other than 
        a corporation for any taxable year shall not exceed 90 percent 
        of the excess (if any) of--
                    ``(A) regular tax liability of the taxpayer for 
                such taxable year, over
                    ``(B) the sum of the credits allowable under 
                subparts A, B, D, E, and F of this part.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.