II 

116TH CONGRESS 

2D SESSION S. 4376 

To amend the Internal Revenue Code of 1986 to permanently allow a tax 

deduction at the time an investment in qualified property is made, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 30, 2020 

Mr. CRUZ (for himself and Ms. MCSALLY) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to permanently 

allow a tax deduction at the time an investment in qualified property is made, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Cost Recovery and Ex5 pensing Acceleration to Transform the Economy and 

6 Jumpstart Opportunities for Businesses and Startups Act 

7 of 2020’’ or the ‘‘CREATE JOBS Act’’. 


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1 SEC. 2. PERMANENT FULL EXPENSING FOR QUALIFIED 

2 PROPERTY. 

3 (a) IN GENERAL.—Paragraph (6) of section 168(k) 

4 of the Internal Revenue Code of 1986 is amended to read 

5 as follows: 

6 ‘‘(6) APPLICABLE PERCENTAGE.—For purposes 

7 of this subsection, the term ‘applicable percentage’ 

8 means, in the case of property placed in service (or, 

9 in the case of a specified plant described in para10 graph (5), a plant which is planted or grafted) after 

11 September 27, 2017, 100 percent.’’. 

12 (b) CONFORMING AMENDMENTS.— 

13 (1) Section 168(k) of the Internal Revenue 

14 Code of 1986 is amended— 

15 (A) in paragraph (2)— 

16 (i) in subparagraph (A)— 

17 (I) in clause (i)(V), by inserting 

18 ‘‘and’’ at the end, 

19 (II) in clause (ii), by striking 

20 ‘‘clause (ii) of subparagraph (E), 

21 and’’ and inserting ‘‘clause (i) of sub22 paragraph (E).’’, and 

23 (III) by striking clause (iii), 

24 (ii) in subparagraph (B)— 

25 (I) in clause (i)— 


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1 (aa) by striking subclauses 

2 (II) and (III), and 

3 (bb) by redesignating sub4 clauses (IV) through (VI) as sub5 clauses (II) through (IV), respec6 tively, 

7 (II) by striking clause (ii), and 

8 (III) by redesignating clauses 

9 (iii) and (iv) as clauses (ii) and (iii), 

10 respectively, 

11 (iii) in subparagraph (C)— 

12 (I) in clause (i), by striking ‘‘and 

13 subclauses (II) and (III) of subpara14 graph (B)(i)’’, and 

15 (II) in clause (ii), by striking 

16 ‘‘subparagraph (B)(iii)’’ and inserting 

17 ‘‘subparagraph (B)(ii)’’, and 

18 (iv) in subparagraph (E)— 

19 (I) by striking clause (i), and 

20 (II) by redesignating clauses (ii) 

21 and (iii) as clauses (i) and (ii), respec22 tively, and 

23 (B) in paragraph (5)(A), by striking 

24 ‘‘planted before January 1, 2027, or is grafted 

25 before such date to a plant that has already 


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1 been planted,’’ and inserting ‘‘planted or graft2 ed’’. 

3 (2) Section 460(c)(6)(B) of such Code is 

4 amended by striking ‘‘which’’ and all that follows 

5 through the period and inserting ‘‘which has a recov6 ery period of 7 years or less.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall take effect as if included in section 

9 13201 of Public Law 115–97. 

10 SEC. 3. NEUTRAL COST RECOVERY DEPRECIATION ADJUST11 MENT FOR RESIDENTIAL RENTAL PROPERTY 

12 AND NONRESIDENTIAL REAL PROPERTY. 

13 (a) IN GENERAL.—Section 168 of the Internal Rev14 enue Code of 1986 is amended by adding at the end there15 of the following new subsection: 

16 ‘‘(n) NEUTRAL COST RECOVERY DEPRECIATION AD17 JUSTMENT FOR RESIDENTIAL RENTAL PROPERTY AND

18 NONRESIDENTIAL REAL PROPERTY.— 

19 ‘‘(1) IN GENERAL.—In the case of any applica20 ble property, the deduction under this section with 

21 respect to such property for any taxable year after 

22 the taxable year during which the property is placed 

23 in service shall be— 


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1 ‘‘(A) the amount determined under this 

2 section for such taxable year without regard to 

3 this subsection, multiplied by 

4 ‘‘(B) the applicable neutral cost recovery 

5 ratio for such taxable year. 

6 ‘‘(2) APPLICABLE NEUTRAL COST RECOVERY

7 RATIO.—For purposes of paragraph (1), the applica8 ble neutral cost recovery ratio for the applicable 

9 property for any taxable year is the number deter10 mined by— 

11 ‘‘(A) dividing— 

12 ‘‘(i) the gross domestic product 

13 deflator for the calendar quarter ending in 

14 such taxable year which corresponds to the 

15 calendar quarter during which the property 

16 was placed in service by the taxpayer, by 

17 ‘‘(ii) the gross domestic product 

18 deflator for the calendar quarter during 

19 which the property was placed in service by 

20 the taxpayer, and 

21 ‘‘(B) then multiplying the number deter22 mined under subparagraph (A) by the number 

23 equal to 1.03 to the nth power where ‘n’ is the 

24 number of full years in the period beginning on 

25 the 1st day of the calendar quarter during 


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1 which the property was placed in service by the 

2 taxpayer and ending on the day before the be3 ginning of the corresponding calendar quarter 

4 ending during such taxable year. 

5 The applicable neutral cost recovery ratio shall never 

6 be less than 1. The applicable neutral cost recovery 

ratio shall be rounded to the nearest 1 7 ⁄1000. 

8 ‘‘(3) SPECIAL RULE FOR EXISTING PROP9 ERTY.—In the case of any applicable property which 

10 is placed in service before the date of enactment of 

11 this subsection, subparagraphs (A)(ii) and (B) of 

12 paragraph (2) shall be applied by substituting ‘cal13 endar quarter which includes the date of enactment 

14 of this subsection’ for ‘calendar quarter during 

15 which the property was placed in service by the tax16 payer’ each place it appears. 

17 ‘‘(4) GROSS DOMESTIC PRODUCT DEFLATOR.— 

18 For purposes of paragraph (2), the gross domestic 

19 product deflator for any calendar quarter is the im20 plicit price deflator for the gross domestic product 

21 for such quarter (as shown in the first revision 

22 thereof). 

23 ‘‘(5) ELECTION NOT TO HAVE SUBSECTION

24 APPLY.—This subsection shall not apply to any ap25 plicable property if the taxpayer elects not to have 


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1 this subsection apply to such property. Such an elec2 tion, once made, shall be irrevocable. 

3 ‘‘(6) ADDITIONAL DEDUCTION NOT TO AFFECT

4 BASIS OR RECAPTURE.— 

5 ‘‘(A) IN GENERAL.—The additional 

6 amount determined under this section by reason 

7 of this subsection shall not be taken into ac8 count in determining the adjusted basis of any 

9 applicable property or of any interest in a pass10 thru entity which holds such property and shall 

11 not be treated as a deduction for depreciation 

12 for purposes of sections 1245 and 1250. 

13 ‘‘(B) PASS-THRU ENTITY DEFINED.—For 

14 purposes of subparagraph (A), the term ‘pass15 thru entity’ means— 

16 ‘‘(i) a regulated investment company, 

17 ‘‘(ii) a real estate investment trust, 

18 ‘‘(iii) an S corporation, 

19 ‘‘(iv) a partnership, 

20 ‘‘(v) an estate or trust, and 

21 ‘‘(vi) a common trust fund. 

22 ‘‘(7) APPLICABLE PROPERTY.—For purposes of 

23 this subsection, the term ‘applicable property’ means 

24 residential rental property or nonresidential real 


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1 property (as such terms are defined in subsection 

2 (e)(2)).’’. 

3 (b) MINIMUM TAX TREATMENT.—Paragraph (1) of 

4 section 56(a) of the Internal Revenue Code of 1986 is 

5 amended by adding at the end thereof the following new 

6 subparagraph: 

7 ‘‘(E) USE OF NEUTRAL COST RECOVERY

8 RATIO.—In the case of property to which sec9 tion 168(n) applies, the deduction allowable 

10 under this paragraph with respect to such prop11 erty for any taxable year (after the taxable year 

12 during which the property is placed in service) 

13 shall be— 

14 ‘‘(i) the amount so allowable for such 

15 taxable year without regard to this sub16 paragraph, multiplied by 

17 ‘‘(ii) the applicable neutral cost recov18 ery ratio for such taxable year (as deter19 mined under section 168(n)). 

20 This subparagraph shall not apply to any prop21 erty with respect to which there is an election 

22 in effect not to have section 168(n) apply.’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to property placed in service beVerDate Sep 11 2014 20:12 Aug 13, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4376.IS S4376

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1 fore, on, or after the date of the enactment of this Act, 

2 with respect to taxable years ending on or after such date. 

3 SEC. 4. ELIMINATION OF AMORTIZATION OF RESEARCH 

4 AND EXPERIMENTAL EXPENDITURES. 

5 (a) IN GENERAL.—Subpart A of part III of subtitle 

6 C of title I of Public Law 115–97 is amended by striking 

7 section 13206. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall take effect on the date of the enactment 

10 of this Act. 

Æ 


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