II 

115TH CONGRESS 

1ST SESSION S. 1144 

To amend the Internal Revenue Code of 1986 to encourage business creation 

by allowing faster recovery of start-up and organizational expenses, to 

simplify accounting methods for small businesses, to expand expensing 

and provide accelerated cost recovery to encourage investment in new 

plants and equipment, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 17, 2017 

Mr. THUNE (for himself and Mr. ROBERTS) 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 

business creation by allowing faster recovery of startup and organizational expenses, to simplify accounting 

methods for small businesses, to expand expensing and 

provide accelerated cost recovery to encourage investment 

in new plants and equipment, 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, 


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1 SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; 

2 TABLE OF CONTENTS. 

3 (a) SHORT TITLE.—This Act may be cited as the 

4 ‘‘Investment in New Ventures and Economic Success 

5 Today Act of 2017’’ or the ‘‘INVEST Act of 2017’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 

10 shall be considered to be made to a section or other provi11 sion of the Internal Revenue Code of 1986. 

12 (c) TABLE OF CONTENTS.— 

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

TITLE I—START-UP AND ORGANIZATIONAL BUSINESS EXPENSES 

Sec. 101. Unification and expansion of deduction for start-up and organizational expenditures. 

TITLE II—ACCOUNTING METHODS 

Sec. 201. Modifications of gross receipts test for use of cash method of accounting by corporations and partnerships. 

Sec. 202. Clarification of inventory accounting rules for small businesses. 

Sec. 203. Modification of rules for capitalization and inclusion in inventory 

costs of certain expenses. 

Sec. 204. Increase in gross receipts test for construction contract exception to 

percentage of completion method. 

TITLE III—MODIFICATIONS OF EXPENSING AND COST RECOVERY 

RULES 

Subtitle A—Expensing Rules 

Sec. 301. Modifications of rules for expensing depreciable business assets. 

Subtitle B—Cost Recovery Rules 

Sec. 311. 50-percent expensing made permanent. 

Sec. 312. Modifications of treatment of certain farm property. 

Sec. 313. Secretarial requirement to reexamine economic depreciation for classes of depreciable property. 


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Sec. 314. Modifications to depreciation limitations on luxury automobiles and 

personal use property. 

Sec. 315. Reduction in amortization period for intangibles. 

1 TITLE I—START-UP AND ORGA2 NIZATIONAL BUSINESS EX3 PENSES 

4 SEC. 101. UNIFICATION AND EXPANSION OF DEDUCTION 

5 FOR START-UP AND ORGANIZATIONAL EX6 PENDITURES. 

7 (a) UNIFICATION.— 

8 (1) IN GENERAL.—Subsection (a) of section 

9 195 is amended by inserting ‘‘and organizational’’ 

10 after ‘‘start-up’’. 

11 (2) ORGANIZATIONAL EXPENDITURES.—Sub12 section (c) of section 195 is amended by adding at 

13 the end the following new paragraph: 

14 ‘‘(3) ORGANIZATIONAL EXPENDITURES.—The 

15 term ‘organizational expenditures’ means any ex16 penditure which— 

17 ‘‘(A) is incident to the creation of a cor18 poration or a partnership, 

19 ‘‘(B) is chargeable to capital account, and 

20 ‘‘(C) is of a character which, if expended 

21 incident to the creation of a corporation or a 

22 partnership having an ascertainable life, would 

23 be amortizable over such life.’’. 


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1 (3) CONFORMING AMENDMENT.—Section 

2 195(b)(1) is amended by inserting ‘‘or organiza3 tional’’ after ‘‘start-up’’ each place it appears. 

4 (b) DOLLAR AMOUNTS AND AMORTIZATION PE5 RIOD.— 

6 (1) DOLLAR AMOUNTS.— 

7 (A) INCREASE.—Clause (ii) of section 

8 195(b)(1)(A) is amended— 

9 (i) by striking ‘‘$5,000’’ and inserting 

10 ‘‘$50,000’’, and 

11 (ii) by striking ‘‘$50,000’’ and insert12 ing ‘‘$100,000’’. 

13 (B) ADJUSTMENT FOR INFLATION.—Para14 graph (3) of section 195(b) is amended to read 

15 as follows: 

16 ‘‘(3) ADJUSTMENT FOR INFLATION.—In the 

17 case of any taxable year beginning after December 

18 31, 2018, the $50,000 and $100,000 amounts in 

19 paragraph (1)(A)(ii) shall each be increased by an 

20 amount equal to— 

21 ‘‘(A) such dollar amount, multiplied by 

22 ‘‘(B) the cost-of-living adjustment deter23 mined under section 1(f)(3) for the calendar 

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1 stituting ‘calendar year 2017’ for ‘calendar year 

2 1992’ in subparagraph (B) thereof. 

3 If any amount as increased under the preceding sen4 tence is not a multiple of $1,000, such amount shall 

5 be rounded to the nearest multiple of $1,000.’’. 

6 (2) AMORTIZATION PERIOD.—Subparagraph 

7 (B) of section 195(b)(1) is amended by striking 

8 ‘‘180-month period’’ and inserting ‘‘120-month pe9 riod’’. 

10 (3) ALLOCATION OF LIMIT TO INITIAL START11 UP AND ORGANIZATIONAL EXPENDITURES.—Section 

12 195(b) is amended— 

13 (A) by striking ‘‘If’’ in paragraph (1) and 

14 inserting ‘‘Subject to paragraph (4), if’’, and 

15 (B) by adding at the end the following new 

16 paragraph: 

17 ‘‘(4) SPECIAL RULES FOR AGGREGATION OF

18 INITIAL EXPENDITURES OF CORPORATIONS AND

19 PARTNERSHIPS.—For purposes of paragraph (1), if, 

20 at the time a corporation or partnership first begins 

21 the active conduct of one or more trades or busi22 nesses, a taxpayer has both start-up expenditures 

23 with respect to such trades or businesses and organi24 zational expenditures with respect to such entity— 


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1 ‘‘(A) any election under paragraph (1) 

2 shall cover both such start-up and organiza3 tional expenditures, 

4 ‘‘(B) the amount of the deduction under 

5 paragraph (1)(A) with respect to all such start6 up and organizational expenditures shall not ex7 ceed the limitation under clause (ii) of para8 graph (1)(A), and 

9 ‘‘(C) the amount of such start-up and or10 ganizational expenditures remaining after such 

11 deduction shall be amortized under paragraph 

12 (1)(B).’’. 

13 (c) CONFORMING AMENDMENTS.— 

14 (1)(A) Part VIII of subchapter B of chapter 1 

15 is amended by striking section 248. 

16 (B) Section 56(g)(4)(D)(ii) is amended by 

17 striking ‘‘Sections 173 and 248’’ and inserting ‘‘Sec18 tion 173’’. 

19 (C) Section 170(b)(2)(D)(ii) is amended by 

20 striking ‘‘(except section 248)’’. 

21 (D) Section 312(n)(3) is amended by striking 

22 ‘‘Sections 173 and 248’’ and inserting ‘‘Sections 173 

23 and 195’’. 

24 (E) Section 535(b)(3) is amended by striking 

25 ‘‘(except section 248)’’. 


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1 (F) Section 545(b)(3) is amended by striking 

2 ‘‘(except section 248)’’. 

3 (G) Section 834(c)(7) is amended by striking 

4 ‘‘(except section 248)’’. 

5 (H) Section 852(b)(2)(C) is amended by strik6 ing ‘‘(except section 248)’’. 

7 (I) Section 857(b)(2)(A) is amended by striking 

8 ‘‘(except section 248)’’. 

9 (J) Section 1363(b)(3) is amended by striking 

10 ‘‘section 248’’ and inserting ‘‘section 195’’. 

11 (K) Section 1375(b)(1)(B)(i) is amended by 

12 striking ‘‘(other than the deduction allowed by sec13 tion 248, relating to organization expenditures)’’. 

14 (L) The table of sections for part VIII of sub15 chapter B of chapter 1 is amended by striking the 

16 item relating to section 248. 

17 (2)(A) Section 709 is amended to read as fol18 lows: 

19 ‘‘SEC. 709. TREATMENT OF SYNDICATION FEES. 

20 ‘‘No deduction shall be allowed under this chapter to 

21 a partnership or to any partner of the partnership for any 

22 amounts paid or incurred to promote the sale of (or to 

23 sell) an interest in the partnership.’’. 

24 (B) The item relating to section 709 in the 

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1 ter 1 is amended by striking ‘‘ORGANIZATION

2 AND’’. 

3 (d) CLERICAL AMENDMENTS.— 

4 (1) The heading of section 195 is amended by 

5 striking ‘‘EXPENDITURES’’ and inserting ‘‘AND

6 ORGANIZATIONAL EXPENDITURES’’. 

7 (2) The item relating to section 195 in the table 

8 of contents of part VI of subchapter B of chapter 1 

9 is amended to read as follows: 

‘‘Sec. 195. Start-up and organizational expenditures.’’. 

10 (e) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to elections which first take effect 

12 for taxable years beginning after December 31, 2017. 

13 TITLE II—ACCOUNTING 

14 METHODS 

15 SEC. 201. MODIFICATIONS OF GROSS RECEIPTS TEST FOR 

16 USE OF CASH METHOD OF ACCOUNTING BY 

17 CORPORATIONS AND PARTNERSHIPS. 

18 (a) MODIFICATIONS OF GROSS RECEIPTS TEST.— 

19 (1) IN GENERAL.—So much of section 448(c) 

20 as precedes paragraph (2) is amended to read as fol21 lows: 

22 ‘‘(c) GROSS RECEIPTS TEST.— 

23 ‘‘(1) IN GENERAL.—A corporation or partner24 ship meets the gross receipts test of this subsection 

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1 ceipts of such entity for the 3-taxable-year period 

2 ending with the taxable year which precedes such 

3 taxable year does not exceed the applicable dollar 

4 limit.’’. 

5 (2) APPLICABLE DOLLAR LIMIT.—Subsection 

6 (c) of section 448 is amended by adding at the end 

7 the following new paragraph: 

8 ‘‘(4) APPLICABLE DOLLAR LIMIT.— 

9 ‘‘(A) IN GENERAL.—The applicable dollar 

10 limit is $15,000,000. 

11 ‘‘(B) ADJUSTMENT FOR INFLATION.—In 

12 the case of any taxable year beginning after De13 cember 31, 2018, the $15,000,000 amount 

14 under subparagraph (A) shall be increased by 

15 an amount equal to— 

16 ‘‘(i) such dollar amount, multiplied by 

17 ‘‘(ii) the cost-of-living adjustment de18 termined under section 1(f)(3) for the cal19 endar year in which the taxable year be20 gins, by substituting ‘calendar year 2017’ 

21 for ‘calendar year 1992’ in subparagraph 

22 (B) thereof. 

23 If any amount as increased under the preceding 

24 sentence is not a multiple of $1,000, such 


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1 amount shall be rounded to the nearest multiple 

2 of $1,000.’’. 

3 (3) CHANGE IN METHOD OF ACCOUNTING.— 

4 Paragraph (7) of section 448(d) is amended— 

5 (A) by striking ‘‘In the case of’’ and all 

6 that follows up to subparagraph (A) and insert7 ing: ‘‘If a taxpayer changes its method of ac8 counting because the taxpayer is prohibited 

9 from using the cash receipts and disbursement 

10 method of accounting by reason of subsection 

11 (a) or is no longer prohibited from using such 

12 method by reason of such subsection—’’, and 

13 (B) by inserting ‘‘and’’ at the end of sub14 paragraph (A), by striking ‘‘, and’’at the end of 

15 subparagraph (B) and inserting a period, and 

16 by striking subparagraph (C). 

17 (4) CONFORMING AMENDMENTS.— 

18 (A) Paragraph (3) of section 448(b) is 

19 amended to read as follows: 

20 ‘‘(3) ENTITIES SATISFYING GROSS RECEIPTS

21 TEST.—Paragraphs (1) and (2) of subsection (a) 

22 shall not apply to any corporation or partnership for 

23 any taxable year if such entity meets the gross re24 ceipts test of subsection (c) for the taxable year.’’. 


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1 (B) Clause (iii) of section 172(b)(1)(E) is 

2 amended by inserting ‘‘, applied by substituting 

3 ‘$5,000,000’ for ‘the applicable dollar limit’ in 

4 paragraph (1) thereof,’’ after ‘‘section 448(c)’’. 

5 (b) APPLICATION OF MODIFICATIONS TO FARMING

6 CORPORATIONS.— 

7 (1) IN GENERAL.—Paragraph (1) of section 

8 447(d) is amended to read as follows: 

9 ‘‘(1) IN GENERAL.—A corporation meets the re10 quirements of this subsection for any taxable year 

11 with respect to its gross receipts if the corporation 

12 meets the gross receipts test of section 448(c) for 

13 the taxable year.’’. 

14 (2) FAMILY CORPORATIONS.—Paragraph (2) of 

15 section 447(d) is amended— 

16 (A) by striking subparagraph (A) and in17 serting the following: 

18 ‘‘(A) IN GENERAL.—In the case of a fam19 ily corporation, in applying section 448(c) for 

20 purposes of paragraph (1)— 

21 ‘‘(i) paragraph (1) of section 448(c) 

22 shall be applied by substituting the appli23 cable family corporation limit for the appli24 cable dollar limit, and 


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1 ‘‘(ii) the rules of subparagraph (B) 

2 shall apply in computing gross receipts.’’, 

3 (B) Clause (i) of section 447(d)(2)(B) is 

4 amended by striking ‘‘the last sentence of para5 graph (1)’’ and inserting ‘‘paragraph (2) of sec6 tion 448(c)’’, and 

7 (C) by adding at the end the following new 

8 subparagraph: 

9 ‘‘(D) APPLICABLE FAMILY CORPORATION

10 LIMIT.— 

11 ‘‘(i) IN GENERAL.—The applicable 

12 family corporation limit is $25,000,000. 

13 ‘‘(ii) ADJUSTMENT FOR INFLATION.— 

14 In the case of any taxable year beginning 

15 after December 31, 2018, the $25,000,000 

16 amount under clause (i) shall be increased 

17 by an amount equal to— 

18 ‘‘(I) such dollar amount, multi19 plied by 

20 ‘‘(II) the cost-of-living adjust21 ment determined under section 1(f)(3) 

22 for the calendar year in which the tax23 able year begins, by substituting ‘cal24 endar year 2017’ for ‘calendar year 

25 1992’ in subparagraph (B) thereof. 


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1 If any amount as increased under the pre2 ceding sentence is not a multiple of 

3 $1,000, such amount shall be rounded to 

4 the nearest multiple of $1,000.’’. 

5 (3) CHANGE IN METHOD OF ACCOUNTING.— 

6 Section 447(f) is amended— 

7 (A) by striking ‘‘In the case of’’ and all 

8 that follows up to paragraph (1) and inserting: 

9 ‘‘If a taxpayer changes its method of account10 ing because the taxpayer is required to use an 

11 accrual method of accounting by reason of sub12 section (a) or is no longer required to use such 

13 method by reason of such subsection—’’, and 

14 (B) by striking paragraph (2) and insert15 ing: 

16 ‘‘(2) such change shall be treated as initiated 

17 by the taxpayer, and’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2017. 

21 SEC. 202. CLARIFICATION OF INVENTORY ACCOUNTING 

22 RULES FOR SMALL BUSINESSES. 

23 (a) CLARIFICATION OF INVENTORY RULES.— 

24 (1) IN GENERAL.—Section 471 is amended by 

25 redesignating subsection (c) as subsection (d) and by 


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1 inserting after subsection (b) the following new sub2 section: 

3 ‘‘(c) SMALL BUSINESS TAXPAYERS NOT REQUIRED

4 TO USE INVENTORIES.— 

5 ‘‘(1) IN GENERAL.—A qualified taxpayer shall 

6 not be required to use inventories under this section 

7 for a taxable year. 

8 ‘‘(2) TREATMENT OF TAXPAYERS NOT USING

9 INVENTORIES.—A qualified taxpayer who is not re10 quired under this subsection to use inventories with 

11 respect to any property for a taxable year beginning 

12 after December 31, 2017, may treat such property 

13 as an incidental material or supply for such taxable 

14 year. 

15 ‘‘(3) QUALIFIED TAXPAYER.—For purposes of 

16 this subsection, the term ‘qualified taxpayer’ means, 

17 with respect to any taxable year, a taxpayer who 

18 meets the gross receipts test of section 448(c) for 

19 the taxable year. Such term shall not include a tax 

20 shelter prohibited from using the cash receipts and 

21 disbursements method of accounting under section 

22 448(a)(3). 

23 ‘‘(4) COORDINATION WITH SECTION 481.—If a 

24 taxpayer changes its method of accounting because 

25 the taxpayer is not required to use inventories by 


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1 reason of paragraph (1) or is required to use inven2 tories because such paragraph no longer applies to 

3 the taxpayer— 

4 ‘‘(A) such change shall be treated as initi5 ated by the taxpayer, and 

6 ‘‘(B) such change shall be treated as made 

7 with the consent of the Secretary.’’. 

8 (2) CONFORMING AMENDMENT.—Subsection (c) 

9 of section 263A is amended by adding at the end the 

10 following new paragraph: 

11 ‘‘(8) EXCLUSION FROM INVENTORY RULES.— 

12 Nothing in this section shall require the use of in13 ventories for any taxable year by a qualified tax14 payer (within the meaning of section 471(c)(3)) who 

15 is not required to use inventories under section 471 

16 for such taxable year.’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2017. 

20 SEC. 203. MODIFICATION OF RULES FOR CAPITALIZATION 

21 AND INCLUSION IN INVENTORY COSTS OF 

22 CERTAIN EXPENSES. 

23 (a) GROSS RECEIPTS EXCEPTION TO APPLY TO

24 PROPERTY PRODUCED BY THE TAXPAYER.—Section 


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1 263A(b) is amended by striking all that follows paragraph 

2 (1) and inserting the following new paragraphs: 

3 ‘‘(2) PROPERTY ACQUIRED FOR RESALE.—Real 

4 or personal property described in section 1221(a)(1) 

5 which is acquired by the taxpayer for resale. 

6 ‘‘(3) EXCEPTION FOR SMALL BUSINESSES.— 

7 This section shall not apply to any property pro8 duced or acquired by the taxpayer during any tax9 able year if the taxpayer is a qualified taxpayer (as 

10 defined in section 471(c)(3)) for the taxable year. 

11 ‘‘(4) FILMS, SOUND RECORDINGS, BOOKS, 

12 ETC.—For purposes of this subsection, the term 

13 ‘tangible personal property’ shall include a film, 

14 sound recording, video tape, book, or similar prop15 erty. 

16 ‘‘(5) COORDINATION WITH SECTION 481.—If a 

17 taxpayer changes its method of accounting because 

18 this section does not apply to the taxpayer by reason 

19 of the exception under paragraph (3) or this section 

20 applies to the taxpayer because such exception no 

21 longer applies to the taxpayer— 

22 ‘‘(A) such change shall be treated as initi23 ated by the taxpayer, and 

24 ‘‘(B) such change shall be treated as made 

25 with the consent of the Secretary.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2017. 

4 SEC. 204. INCREASE IN GROSS RECEIPTS TEST FOR CON5 STRUCTION CONTRACT EXCEPTION TO PER6 CENTAGE OF COMPLETION METHOD. 

7 (a) INCREASE.— 

8 (1) IN GENERAL.—Clause (ii) of section 

9 460(e)(1)(B) is amended to read as follows: 

10 ‘‘(ii) who meets the gross receipts test 

11 of section 448(c) for the taxable year in 

12 which such contract is entered into.’’. 

13 (2) CONFORMING AMENDMENTS.— 

14 (A) Paragraph (2) of section 460(e) is 

15 amended to read as follows: 

16 ‘‘(2) ADDITIONAL RULES FOR DETERMINING

17 GROSS RECEIPTS.—For purposes of paragraph 

18 (1)(B)(ii), the Secretary shall prescribe regulations 

19 which provide attribution rules similar to section 

20 448(c) and which take into account gross receipts of 

21 taxpayers who engage in construction contracts 

22 through partnerships, joint ventures, and corpora23 tions and which would otherwise not be taken into 

24 account under such section.’’. 


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1 (B) Section 460(e) is amended by striking 

2 paragraph (3) and by redesignating paragraphs 

3 (4) through (6) as paragraphs (3) through (5), 

4 respectively. 

5 (C) The last sentence of section 56(a)(3) is 

6 amended by striking ‘‘section 460(e)(6)’’ and 

7 inserting ‘‘section 460(e)(5)’’. 

8 (b) COORDINATION WITH SECTION 481.—Section 

9 460(e), as amended by subsection (a), is amended by add10 ing at the end the following: 

11 ‘‘(6) COORDINATION WITH SECTION 481.—If a 

12 taxpayer changes its method of accounting because 

13 subsections (a), (b), and (c) (1) and (2) do not apply 

14 by reason of the exception under paragraph (1)(B) 

15 or such subsections apply to the taxpayer because 

16 such exception no longer applies to the taxpayer— 

17 ‘‘(A) such change shall be treated as initi18 ated by the taxpayer, 

19 ‘‘(B) such change shall be treated as made 

20 with the consent of the Secretary, and 

21 ‘‘(C) such change shall be permitted only 

22 on a cut-off basis and no adjustments under 

23 section 481(a) shall be made.’’. 


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1 (c) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to contracts entered into after De3 cember 31, 2017, in taxable years ending after such date. 

4 TITLE III—MODIFICATIONS OF 

5 EXPENSING AND COST RE6 COVERY RULES 

7 Subtitle A—Expensing Rules 

8 SEC. 301. MODIFICATIONS OF RULES FOR EXPENSING DE9 PRECIABLE BUSINESS ASSETS. 

10 (a) INCREASE IN LIMITATION.— 

11 (1) DOLLAR LIMITATION.—Section 179(b)(1) 

12 by striking ‘‘$500,000’’ and inserting ‘‘$2,000,000’’. 

13 (2) REDUCTION IN LIMITATION.—Section 

14 179(b)(2) is amended by striking ‘‘$2,000,000’’ and 

15 inserting ‘‘$3,000,000’’. 

16 (3) INFLATION ADJUSTMENTS.— 

17 (A) IN GENERAL.—Subparagraph (A) of 

18 section 179(b)(6) is amended— 

19 (i) by striking ‘‘2015’’ and inserting 

20 ‘‘2018’’, and 

21 (ii) by striking ‘‘calendar year 2014’’ 

22 in clause (ii) and inserting ‘‘calendar year 

23 2017’’. 

24 (B) SPORT UTILITY VEHICLES.—Section 

25 179(b)(6) is amended— 


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1 (i) by striking ‘‘paragraphs (1) and 

2 (2)’’ in subparagraph (A) and inserting 

3 ‘‘paragraphs (1), (2), and (5)(A)’’, and 

4 (ii) by inserting ‘‘(($100 in the case of 

5 any increase in the amount under para6 graph (5)(A))’’ after ‘‘$10,000’’ in sub7 paragraph (B). 

8 (b) SECTION 179 PROPERTY TO INCLUDE QUALI9 FIED REAL PROPERTY.— 

10 (1) IN GENERAL.—Subparagraph (B) of section 

11 179(d)(1) is amended to read as follows: 

12 ‘‘(B) which is— 

13 ‘‘(i) section 1245 property (as defined 

14 in section 1245(a)(3)), or 

15 ‘‘(ii) qualified real property (as de16 fined in subsection (f)), and’’. 

17 (2) QUALIFIED REAL PROPERTY DEFINED.— 

18 Section 179(f) is amended to read as follows: 

19 ‘‘(f) QUALIFIED REAL PROPERTY.—For purposes of 

20 this subsection, the term ‘qualified real property’ means— 

21 ‘‘(1) any qualified improvement property de22 scribed in section 168(k)(3), and 

23 ‘‘(2) any of the following improvements to non24 residential real property placed in service after the 

25 date such property was first placed in service: 


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1 ‘‘(A) Roofs. 

2 ‘‘(B) Heating, ventilation, and air-condi3 tioning property. 

4 ‘‘(C) Fire protection and alarm systems. 

5 ‘‘(D) Security systems.’’. 

6 (c) REPEAL OF EXCLUSION FOR CERTAIN PROP7 ERTY.—The last sentence of section 179(d)(1) is amended 

8 by inserting ‘‘(other than paragraph (2) thereof)’’ after 

9 ‘‘section 50(b)’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to property placed in service in 

12 taxable years beginning after December 31, 2017. 

13 Subtitle B—Cost Recovery Rules 

14 SEC. 311. 50-PERCENT EXPENSING MADE PERMANENT. 

15 (a) IN GENERAL.—Section 168(k)(2) is amended to 

16 read as follows: 

17 ‘‘(2) QUALIFIED PROPERTY.—For purposes of 

18 this subsection— 

19 ‘‘(A) IN GENERAL.—The term ‘qualified 

20 property’ means property— 

21 ‘‘(i)(I) to which this section applies 

22 which has a recovery period of 20 years or 

23 less, 

24 ‘‘(II) which is computer software (as 

25 defined in section 167(f)(1)(B)) for which 


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1 a deduction is allowable under section 

2 167(a) without regard to this subsection, 

3 ‘‘(III) which is water utility property, 

4 or 

5 ‘‘(IV) which is qualified improvement 

6 property, and 

7 ‘‘(ii) the original use of which com8 mences with the taxpayer. 

9 ‘‘(B) EXCEPTION FOR ALTERNATIVE DE10 PRECIATION PROPERTY.—The term ‘qualified 

11 property’ shall not include any property to 

12 which the alternative depreciation system under 

13 subsection (g) applies, determined— 

14 ‘‘(i) without regard to paragraph (7) 

15 of subsection (g) (relating to election to 

16 have system apply), and 

17 ‘‘(ii) after application of section 

18 280F(b) (relating to listed property with 

19 limited business use). 

20 ‘‘(C) SPECIAL RULES.— 

21 ‘‘(i) SALE-LEASEBACKS.—For pur22 poses of clause (ii) and subparagraph 

23 (A)(ii), if property is— 

24 ‘‘(I) originally placed in service 

25 by a person, and 


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1 ‘‘(II) sold and leased back by 

2 such person within 3 months after the 

3 date such property was originally 

4 placed in service, 

5 such property shall be treated as originally 

6 placed in service not earlier than the date 

7 on which such property is used under the 

8 leaseback referred to in subclause (II). 

9 ‘‘(ii) SYNDICATION.—For purposes of 

10 subparagraph (A)(ii), if— 

11 ‘‘(I) property is originally placed 

12 in service by the lessor of such prop13 erty, 

14 ‘‘(II) such property is sold by 

15 such lessor or any subsequent pur16 chaser within 3 months after the date 

17 such property was originally placed in 

18 service (or, in the case of multiple 

19 units of property subject to the same 

20 lease, within 3 months after the date 

21 the final unit is placed in service, so 

22 long as the period between the time 

23 the first unit is placed in service and 

24 the time the last unit is placed in 


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•S 1144 IS

1 service does not exceed 12 months), 

2 and 

3 ‘‘(III) the user of such property 

4 after the last sale during such 3- 

5 month period remains the same as 

6 when such property was originally 

7 placed in service, 

8 such property shall be treated as originally 

9 placed in service not earlier than the date 

10 of such last sale. 

11 ‘‘(D) COORDINATION WITH SECTION

12 280F.—For purposes of section 280F— 

13 ‘‘(i) AUTOMOBILES.—In the case of a 

14 passenger automobile (as defined in section 

15 280F(d)(5)) which is qualified property, 

16 the Secretary shall increase the limitation 

17 under section 280F(a)(1)(A)(i) to an 

18 amount equal to the lesser of— 

19 ‘‘(I) 50 percent of the adjusted 

20 basis of such automobile, or 

21 ‘‘(II) $25,000. 

22 ‘‘(ii) LISTED PROPERTY.—The deduc23 tion allowable under paragraph (1) shall be 

24 taken into account in computing any re25 capture amount under section 280F(b)(2). 


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1 ‘‘(iii) INFLATION ADJUSTMENT.—In 

2 the case of any taxable year beginning in 

3 a calendar year after 2018, the $25,000 

4 amount in clause (i) shall be increased by 

5 an amount equal to— 

6 ‘‘(I) such dollar amount, multi7 plied by 

8 ‘‘(II) the automobile price infla9 tion adjustment determined under sec10 tion 280F(d)(7)(B)(i) for the calendar 

11 year in which such taxable year begins 

12 by substituting ‘2017’ for ‘1987’ in 

13 subclause (II) thereof. 

14 If any increase under the preceding sen15 tence is not a multiple of $100, such in16 crease shall be rounded to the nearest mul17 tiple of $100. 

18 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

19 MINIMUM TAX.—For purposes of determining 

20 alternative minimum taxable income under sec21 tion 55, the deduction under section 167 for 

22 qualified property shall be determined without 

23 regard to any adjustment under section 56.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) AMENDMENTS RELATED TO 50-PERCENT

2 EXPENSING.— 

3 (A) Each of the following provisions are 

4 amended by striking ‘‘(2)(F)’’ each place it ap5 pears and inserting ‘‘(2)(D)’’: 

6 (i) Subparagraphs (A)(i), (B)(i), and 

7 (D)(ii)(I) of section 168(k)(4). 

8 (ii) Section 168(k)(7). 

9 (B) Section 168(k)(5) is amended— 

10 (i) in subparagraph (A)— 

11 (I) by striking ‘‘before January 

12 1, 2020’’, and 

13 (II) by striking ‘‘before such 

14 date’’, 

15 (ii) in subparagraph (B)(ii)— 

16 (I) by inserting ‘‘crop or’’ after 

17 ‘‘will have more than one’’, and 

18 (II) by inserting ‘‘a marketable 

19 crop or yield of’’ after ‘‘begins bear20 ing’’, 

21 (iii) by striking ‘‘(2)(G)’’ in subpara22 graph (E) and inserting ‘‘(2)(E)’’, and 

23 (iv) by striking subparagraph (F). 

24 (C) Section 168(k), as amended by sub25 paragraphs (A)(ii) and (D), is amended by 


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•S 1144 IS

1 striking paragraph (6) and by redesignating 

2 paragraph (7) as paragraph (6). 

3 (D) Section 168(k)(7), as in effect before 

4 the amendments made by subparagraphs (A)(ii) 

5 and (C), is amended by striking ‘‘paragraphs 

6 (1) and (2)(F)’’ and inserting ‘‘paragraphs (1), 

7 (2)(F), and (4)’’. 

8 (E) Section 168(k) is amended by striking 

9 ‘‘ACQUIRED AFTER DECEMBER 31, 2007, AND

10 BEFORE JANUARY 1, 2020’’ in the heading 

11 thereof. 

12 (F) Subsections (e)(7)(B), (k)(4), 

13 (l)(3)(A), (m)(2)(B)(i), and (n)(2)(B)(i) of sec14 tion 168 are each amended by striking ‘‘bonus 

15 depreciation’’ each place it appears in the text 

16 and headings thereof and inserting ‘‘50-percent 

17 expensing’’. 

18 (2) OTHER CONFORMING AMENDMENTS.— 

19 (A) Section 168(l)(3)(B) is amended by 

20 striking ‘‘subsection (k)(2)(D)’’ and inserting 

21 ‘‘subsection (k)(2)(B)’’. 

22 (B) Section 168(l)(4) is amended by strik23 ing ‘‘subsection (k)(2)(E)’’ and inserting ‘‘sub24 section (k)(2)(C)’’. 


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•S 1144 IS

1 (C) Section 168(l)(5) is amended by strik2 ing ‘‘subsection (k)(2)(G)’’ and inserting ‘‘sub3 section (k)(2)(E)’’. 

4 (D) Section 460(c)(6)(B) is amended by 

5 striking ‘‘which—’’ and all that follows and in6 serting ‘‘which has a recovery period of 7 years 

7 or less.’’. 

8 (c) EFFECTIVE DATES.— 

9 (1) IN GENERAL.—The amendments made by 

10 this section shall apply to property placed in service 

11 after December 31, 2017, in taxable years ending 

12 after such date. 

13 (2) CERTAIN TECHNICAL CORRECTIONS.— 

14 (A) The amendments made by subsection 

15 (b)(1)(B)(ii) shall apply to specified plants 

16 planted or grafted after December 31, 2015. 

17 (B) The amendment made by subsection 

18 (b)(1)(D) shall apply to property placed in serv19 ice after December 31, 2015, in taxable years 

20 ending after such date. 

21 SEC. 312. MODIFICATIONS OF TREATMENT OF CERTAIN 

22 FARM PROPERTY. 

23 (a) TREATMENT OF CERTAIN FARM PROPERTY AS 5- 

24 YEAR PROPERTY.—Clause (vii) of section 168(e)(3)(B) is 


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•S 1144 IS

1 amended by striking ‘‘after December 31, 2008, and which 

2 is placed in service before January 1, 2010’’. 

3 (b) REPEAL OF REQUIRED USE OF 150-PERCENT

4 DECLINING BALANCE METHOD.—Section 168(b)(2) is 

5 amended by striking subparagraph (B) and by redesig6 nating subparagraphs (C) and (D) as subparagraphs (B) 

7 and (C), respectively. 

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

9 this section shall apply to property placed in service after 

10 December 31, 2017, in taxable years ending after such 

11 date. 

12 SEC. 313. SECRETARIAL REQUIREMENT TO REEXAMINE 

13 ECONOMIC DEPRECIATION FOR CLASSES OF 

14 DEPRECIABLE PROPERTY. 

15 (a) IN GENERAL.—Paragraph (1) of section 168(i) 

16 is amended to read as follows: 

17 ‘‘(1) CLASS LIFE.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 this section, the term ‘class life’ means the class 

20 life (if any) which would be applicable with re21 spect to any property as of January 1, 1986, 

22 under subsection (m) of section 167 (deter23 mined without regard to paragraph (4) and as 

24 if the taxpayer had made an election under 

25 such subsection). The reference in this paraVerDate Sep 11 2014 20:35 May 19, 2017 Jkt 069200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S1144.IS S1144

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1 graph to subsection (m) of section 167 shall be 

2 treated as a reference to such subsection as in 

3 effect on the day before the date of the enact4 ment of the Revenue Reconciliation Act of 

5 1990. 

6 ‘‘(B) SECRETARIAL AUTHORITY TO MODIFY

7 REV. PROC. 87–56.— 

8 ‘‘(i) IN GENERAL.—The Secretary, 

9 through the Office of Tax Analysis and in 

10 consultation with the Bureau of Economic 

11 Analysis of the Department of Commerce, 

12 shall conduct an on-going study to— 

13 ‘‘(I) determine, and develop a 

14 schedule of, the economic depreciation 

15 of the major categories of depreciable 

16 property (other than specified prop17 erty) to approximate constant 

18 straight-line depreciation, and 

19 ‘‘(II) develop recommendations 

20 regarding the proper economic depre21 ciation for specified property. 

22 ‘‘(ii) REPORT.—Not later than De23 cember 31, 2020, and not less frequently 

24 than every 5 years after such date, the 

25 Secretary shall submit to the Committee 


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•S 1144 IS

1 on Finance of the Senate and to the Com2 mittee on Ways and Means of the House 

3 of Representatives— 

4 ‘‘(I) any schedule developed 

5 under clause (i)(I), and 

6 ‘‘(II) any recommendations devel7 oped under clause (i)(II). 

8 ‘‘(iii) EFFECTIVE DATE OF SCHED9 ULES.—Any schedule developed under 

10 clause (i)(I) and submitted to Congress 

11 under clause (ii) shall take effect with re12 spect to property placed in service on or 

13 after first day of the first calendar year be14 ginning at least 1 year after the date such 

15 schedule is submitted. 

16 ‘‘(C) TREATMENT UNDER CONGRESSIONAL

17 REVIEW ACT.—For purposes of applying chap18 ter 8 of title 5, United States Code, any sched19 ule developed and submitted under subpara20 graph (B) shall be treated as a major rule. 

21 ‘‘(D) SPECIFIED PROPERTY.—For pur22 poses of subparagraph (B), the term ‘specified 

23 property’ means— 


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1 ‘‘(i) any property which is classified 

2 under subsection (e)(3) (other than sub3 paragraph (C)(v) thereof), or 

4 ‘‘(ii) any nonresidential real property, 

5 residential rental property, railroad grad6 ing or tunnel bore, or water utility prop7 erty.’’. 

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

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

10 of this Act. 

11 SEC. 314. MODIFICATIONS TO DEPRECIATION LIMITATIONS 

12 ON LUXURY AUTOMOBILES AND PERSONAL 

13 USE PROPERTY. 

14 (a) LUXURY AUTOMOBILES.— 

15 (1) IN GENERAL.—280F(a)(1)(A) is amended— 

16 (A) by striking ‘‘$2,560’’ in clause (i) and 

17 inserting ‘‘$10,000’’, 

18 (B) by striking ‘‘$4,100’’ in clause (ii) and 

19 inserting ‘‘$16,000’’, 

20 (C) by striking ‘‘$2,450’’ in clause (iii) and 

21 inserting ‘‘$9,600’’, and 

22 (D) by striking ‘‘$1,475’’ in clause (iv) and 

23 inserting ‘‘$5,760’’. 

24 (2) CONFORMING AMENDMENTS.— 


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1 (A) Clause (ii) of section 280F(a)(1)(B) is 

2 amended by striking ‘‘$1,475’’ in the text and 

3 heading and inserting ‘‘$5,760’’. 

4 (B) Paragraph (7) of section 280F(d) is 

5 amended— 

6 (i) by striking ‘‘1988’’ in subpara7 graph (A) and inserting ‘‘2018’’, and 

8 (ii) by striking ‘‘1987’’ in subpara9 graph (B)(i)(II) and inserting ‘‘2017’’. 

10 (b) REMOVAL OF COMPUTER EQUIPMENT FROM

11 LISTED PROPERTY.— 

12 (1) IN GENERAL.—Section 280F(d)(4)(A) is 

13 amended by inserting ‘‘and’’ at the end of clause 

14 (iii) and by striking clause (iv). 

15 (2) CONFORMING AMENDMENT.—Section 

16 280F(d)(4) is amended by striking subparagraph 

17 (B) and by redesignating subparagraph (C) as sub18 paragraph (B). 

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

20 this section shall apply to property placed in service after 

21 December 31, 2017, in taxable years ending after such 

22 date. 


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1 SEC. 315. REDUCTION IN AMORTIZATION PERIOD FOR IN2 TANGIBLES. 

3 (a) IN GENERAL.—Section 197(a) is amended by 

4 adding at the end the following new sentence: ‘‘In the case 

5 of such an intangible acquired after the date of the enact6 ment of the INVEST Act of 2017, the preceding sentence 

7 shall be applied by substituting ‘10-year period’ for ‘15- 

8 year period’.’’. 

9 (b) APPLICATION OF ANTI-CHURNING RULES.—Sec10 tion 197(f)(9) is amended by adding at the end the fol11 lowing: 

12 ‘‘(G) APPLICATION TO INVEST ACT

13 CHANGES.—If subparagraph (A) or (F) would 

14 apply to any section 197 intangible if— 

15 ‘‘(i) ‘the date of the enactment of the 

16 INVEST Act of 2017’ were substituted for 

17 ‘the date of the enactment of this section’ 

18 each place it appears in each such sub19 paragraph, and 

20 ‘‘(ii) ‘May 17, 2017’ were substituted 

21 for ‘July 25, 1991’ each place it appears in 

22 subparagraph (A), 

23 then the last sentence of subsection (a) (relat24 ing to 10-year amortization) shall not apply to 

25 the transferee of such intangible.’’. 


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1 (c) CONFORMING AMENDMENT.—Section 

2 197(e)(4)(D)(i) is amended by inserting ‘‘(10 years in the 

3 case of a right acquired after the date of the enactment 

4 of the INVEST Act of 2017)’’ after ‘‘15 years’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section apply to acquisitions after the date of the en7 actment of this Act in taxable years ending after such 

8 date. 

Æ 


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