II

107TH CONGRESS

1ST SESSION S. 1487

To amend the Internal Revenue Code of 1986 to encourage the patronage

of the hospitality, restaurant, and entertainment industries of New York

City.

IN THE SENATE OF THE UNITED STATES

OCTOBER 3, 2001

Mr. SCHUMER (for himself and Mrs. CLINTON) 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 encourage

the patronage of the hospitality, restaurant, and entertainment industries of New York City.

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 ‘‘I Love New York Tax

5 Deduction Act of 2001’’.

6 SEC. 2. MEALS, ENTERTAINMENT, AND LODGING EXPENSES

7 IN NEW YORK CITY.

8 (a) INCREASE IN DEDUCTION FOR BUSINESS MEAL

9 AND ENTERTAINMENT EXPENSES.—Subsection (n) of sec-
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1 tion 274 of the Internal Revenue Code of 1986 (relating

2 to only 50 percent of meal and entertainment expenses

3 allowed as deduction) is amended by adding at the end

4 the following new paragraph:

5 ‘‘(4) SPECIAL RULE FOR MEALS AND ENTER6 TAINMENT PROVIDED IN NEW YORK CITY.—In the

7 case of food, beverages, entertainment, amusement,

8 and recreation furnished in New York City during

9 the period beginning on the date of the enactment

10 of the I Love New York Tax Deduction Act of 2001

11 and ending on the last day of the first taxable year

12 beginning after December 31, 2001, paragraph (1)

13 shall be applied by substituting ‘80 percent’ for ‘50

14 percent’.’’.

15 (b) DEDUCTION FOR PERSONAL MEAL AND ENTER16 TAINMENT EXPENSES.—

17 (1) IN GENERAL.—Section 262 of such Code

18 (relating to personal, living, and family expenses) is

19 amended by adding at the end the following new

20 subsection:

21 ‘‘(c) MEALS, LODGING, AND ENTERTAINMENT PRO22 VIDED IN NEW YORK CITY.—

23 ‘‘(1) IN GENERAL.—Subsection (a) shall not

24 apply to an amount equal to 50 percent of the ex25 penses paid or incurred for food, beverages, lodging,
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1 entertainment, amusement, or recreation furnished

2 in a trade or business establishment in New York

3 City during the period beginning on the date of the

4 enactment of the I Love New York Tax Deduction

5 Act of 2001 and ending on the last day of the first

6 taxable year beginning after December 31, 2001.

7 ‘‘(2) LIMITATION.—The amount taken into ac8 count under paragraph (1) for such taxable year

9 shall not exceed $500 ($1,000 in the case of joint

10 return).

11 ‘‘(3) SPECIAL RULES.—

12 ‘‘(A) SUBSTANTIATION.—For purposes of

13 this subsection, rules similar to the rules of sec14 tion 274(d) shall apply.

15 ‘‘(B) RELATED PERSON.—No deduction

16 shall be allowed under paragraph (1) for an ex17 pense for food, beverages, lodging, entertain18 ment, amusement, or recreation furnished by a

19 related person (within the meaning of section

20 144(a)(3)(A)).

21 ‘‘(4) ILLEGAL ACTIVITIES.—No deduction shall

22 be allowed under paragraph (1) for any amount paid

23 or incurred in connection with a violation of a crimi24 nal law.
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1 ‘‘(5) DENIAL OF DOUBLE BENEFIT.—No deduc2 tion shall be allowed under paragraph (1) for any

3 expense for which a deduction or credit is allowed

4 under any other provision of this chapter.’’.

5 (2) DEDUCTION ALLOWED IN COMPUTING AD6 JUSTED GROSS INCOME.—Section 62(a) of such

7 Code is amended by inserting after paragraph (18)

8 the following:

9 ‘‘(19) MEALS, LODGING, AND ENTERTAINMENT

10 PROVIDED IN NEW YORK CITY.—The deduction al11 lowed by section 262(c).’’.

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

13 this section shall apply to amounts paid or incurred after

14 the date of the enactment of this Act.

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