II 

113TH CONGRESS 

1ST SESSION S. 1085 

To amend the Internal Revenue Code of 1986 to provide tax incentives 

for small businesses. 

IN THE SENATE OF THE UNITED STATES 

JUNE 3, 2013 

Ms. COLLINS (for herself and Mr. CASEY) 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 provide 

tax incentives for small businesses. 

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 ‘‘Small Business Tax 

5 Certainty and Growth Act of 2013’’. 

6 SEC. 2. SENSE OF THE SENATE REGARDING TAX REFORM. 

7 It is the sense of the Senate that Congress should 

8 undertake comprehensive tax reform legislation to— 

9 (1) make our system fairer and simpler; and 

10 (2) promote economic growth. 


tkelley on DSK3SPTVN1PROD with BILLS
2 

•S 1085 IS

1 SEC. 3. PERMANENT DOUBLING OF DEDUCTIONS FOR 

2 START-UP EXPENSES, ORGANIZATIONAL EX3 PENSES, AND SYNDICATION FEES. 

4 (a) START-UP EXPENSES.— 

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

6 195(b)(1)(A) of the Internal Revenue Code of 1986 

7 is amended— 

8 (A) by striking ‘‘$5,000’’ and inserting 

9 ‘‘$10,000’’, and 

10 (B) by striking ‘‘$50,000’’ and inserting 

11 ‘‘$60,000’’. 

12 (2) CONFORMING AMENDMENT.—Subsection (b) 

13 of section 195 of the Internal Revenue Code of 1986 

14 is amended by striking paragraph (3). 

15 (b) ORGANIZATIONAL EXPENSES.—Subparagraph 

16 (B) of section 248 of the Internal Revenue Code of 1986 

17 is amended— 

18 (1) by striking ‘‘$5,000’’ and inserting 

19 ‘‘$10,000’’, and 

20 (2) by striking ‘‘$50,000’’ and inserting 

21 ‘‘$60,000’’. 

22 (c) ORGANIZATION AND SYNDICATION FEES.— 

23 Clause (ii) of section 709(b)(1)(A) of the Internal Revenue 

24 Code of 1986 is amended— 

25 (1) by striking ‘‘$5,000’’ and inserting 

26 ‘‘$10,000’’, and 


tkelley on DSK3SPTVN1PROD with BILLS
3 

•S 1085 IS

1 (2) by striking ‘‘$50,000’’ and inserting 

2 ‘‘$60,000’’. 

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

4 this section shall apply to amounts paid or incurred in tax5 able years ending on or after the date of the enactment 

6 of this Act. 

7 SEC. 4. CLARIFICATION OF CASH ACCOUNTING RULES FOR 

8 SMALL BUSINESS. 

9 (a) CASH ACCOUNTING PERMITTED.— 

10 (1) IN GENERAL.—Section 446 of the Internal 

11 Revenue Code of 1986 (relating to general rule for 

12 methods of accounting) is amended by adding at the 

13 end the following new subsection: 

14 ‘‘(g) CERTAIN SMALL BUSINESS TAXPAYERS PER15 MITTED TO USE CASH ACCOUNTING METHOD WITHOUT

16 LIMITATION.— 

17 ‘‘(1) IN GENERAL.—An eligible taxpayer shall 

18 not be required to use an accrual method of account19 ing for any taxable year. 

20 ‘‘(2) ELIGIBLE TAXPAYER.—For purposes of 

21 this subsection, a taxpayer is an eligible taxpayer 

22 with respect to any taxable year if— 

23 ‘‘(A) for all prior taxable years beginning 

24 after December 31, 2013, the taxpayer (or any 


tkelley on DSK3SPTVN1PROD with BILLS
4 

•S 1085 IS

1 predecessor) met the gross receipts test of sec2 tion 448(c), and 

3 ‘‘(B) the taxpayer is not subject to section 

4 447 or 448.’’. 

5 (2) EXPANSION OF GROSS RECEIPTS TEST.— 

6 (A) IN GENERAL.—Paragraph (3) of sec7 tion 448(b) of such Code (relating to entities 

8 with gross receipts of not more than 

9 $5,000,000) is amended by striking 

10 ‘‘$5,000,000’’ in the text and in the heading 

11 and inserting ‘‘$10,000,000’’. 

12 (B) CONFORMING AMENDMENTS.—Section 

13 448(c) of such Code is amended— 

14 (i) by striking ‘‘$5,000,000’’ each 

15 place it appears in the text and in the 

16 heading of paragraph (1) and inserting 

17 ‘‘$10,000,000’’, and 

18 (ii) by adding at the end the following 

19 new paragraph: 

20 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

21 any taxable year beginning in a calendar year after 

22 2014, the dollar amount contained in subsection 

23 (b)(3) and paragraph (1) of this subsection shall be 

24 increased by an amount equal to— 

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


tkelley on DSK3SPTVN1PROD with BILLS
5 

•S 1085 IS

1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for the calendar 

3 year in which the taxable year begins, by sub4 stituting ‘calendar year 2013’ for ‘calendar year 

5 1992’ in subparagraph (B) thereof. 

6 If any amount as adjusted under this subpara7 graph is not a multiple of $100,000, such 

8 amount shall be rounded to the nearest multiple 

9 of $100,000.’’. 

10 (b) CLARIFICATION OF INVENTORY RULES FOR

11 SMALL BUSINESS.— 

12 (1) IN GENERAL.—Section 471 of the Internal 

13 Revenue Code of 1986 (relating to general rule for 

14 inventories) is amended by redesignating subsection 

15 (c) as subsection (d) and by inserting after sub16 section (b) the following new subsection: 

17 ‘‘(c) SMALL BUSINESS TAXPAYERS NOT REQUIRED

18 TO USE INVENTORIES.— 

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

20 not be required to use inventories under this section 

21 for a taxable year. 

22 ‘‘(2) TREATMENT OF TAXPAYERS NOT USING

23 INVENTORIES.—If a qualified taxpayer does not use 

24 inventories with respect to any property for any tax25 able year beginning after December 31, 2013, such 


tkelley on DSK3SPTVN1PROD with BILLS
6 

•S 1085 IS

1 property shall be treated as a material or supply 

2 which is not incidental. 

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

4 this subsection, the term ‘qualified taxpayer’ 

5 means— 

6 ‘‘(A) any eligible taxpayer (as defined in 

7 section 446(g)(2)), and 

8 ‘‘(B) any taxpayer described in section 

9 448(b)(3).’’. 

10 (2) INCREASED ELIGIBILITY FOR SIMPLIFIED

11 DOLLAR-VALUE LIFO METHOD.—Section 474(c) is 

12 amended by striking ‘‘$5,000,000’’ and inserting 

13 ‘‘the dollar amount in effect under section 

14 448(c)(1)’’. 

15 (c) EFFECTIVE DATE AND SPECIAL RULES.— 

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

17 this section shall apply to taxable years beginning 

18 after December 31, 2013. 

19 (2) CHANGE IN METHOD OF ACCOUNTING.—In 

20 the case of any taxpayer changing the taxpayer’s 

21 method of accounting for any taxable year under the 

22 amendments made by this section— 

23 (A) such change shall be treated as initi24 ated by the taxpayer; 


tkelley on DSK3SPTVN1PROD with BILLS
7 

•S 1085 IS

1 (B) such change shall be treated as made 

2 with the consent of the Secretary of the Treas3 ury; and 

4 (C) the net amount of the adjustments re5 quired to be taken into account by the taxpayer 

6 under section 481 of the Internal Revenue Code 

7 of 1986 shall be taken into account over a pe8 riod (not greater than 4 taxable years) begin9 ning with such taxable year. 

10 SEC. 5. PERMANENT EXTENSION OF EXPENSING LIMITA11 TION. 

12 (a) DOLLAR LIMITATION.—Section 179(b)(1) of the 

13 Internal Revenue Code of 1986 is amended by striking 

14 ‘‘shall not exceed’’ and all that follows and inserting ‘‘shall 

15 not exceed $250,000.’’. 

16 (b) REDUCTION IN LIMITATION.—Section 179(b)(2) 

17 of such Code is amended by striking ‘‘exceeds’’ and all 

18 that follows and inserting ‘‘exceeds $800,000.’’. 

19 (c) INFLATION ADJUSTMENT.—Subsection (b) of sec20 tion 179 of such Code is amended by adding at the end 

21 the following new paragraph: 

22 ‘‘(6) INFLATION ADJUSTMENT.— 

23 ‘‘(A) IN GENERAL.—In the case of any 

24 taxable year beginning in a calendar year after 

25 2014, the $250,000 in paragraph (1) and the 


tkelley on DSK3SPTVN1PROD with BILLS
8 

•S 1085 IS

1 $800,000 amount in paragraph (2) shall each 

2 be increased by an amount equal to— 

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

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section 1(f)(3) for the cal6 endar year in which the taxable year be7 gins, by substituting ‘calendar year 2013’ 

8 for ‘calendar year 1992’ in subparagraph 

9 (B) thereof. 

10 ‘‘(B) ROUNDING.— 

11 ‘‘(i) DOLLAR LIMITATION.—If the 

12 amount in paragraph (1) as increased 

13 under subparagraph (A) is not a multiple 

14 of $1,000, such amount shall be rounded 

15 to the nearest multiple of $1,000. 

16 ‘‘(ii) PHASEOUT AMOUNT.—If the 

17 amount in paragraph (2) as increased 

18 under subparagraph (A) is not a multiple 

19 of $10,000, such amount shall be rounded 

20 to the nearest multiple of $10,000.’’. 

21 (d) COMPUTER SOFTWARE.—Section 

22 179(d)(1)(A)(ii) of such Code is amended by striking ‘‘and 

23 before 2014’’. 

24 (e) ELECTION.—Section 179(c)(2) of such Code is 

25 amended by striking ‘‘and before 2014’’. 


tkelley on DSK3SPTVN1PROD with BILLS
9 

•S 1085 IS

1 (f) SPECIAL RULES FOR TREATMENT OF QUALIFIED

2 REAL PROPERTY.— 

3 (1) IN GENERAL.—Section 179(f)(1) of such 

4 Code is amended by striking ‘‘beginning in 2010, 

5 2011, 2012, or 2013’’ and inserting ‘‘beginning 

6 after 2009’’. 

7 (2) CONFORMING AMENDMENT.—Section 179(f) 

8 of such Code is amended by striking paragraph (4). 

9 (g) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2013. 

12 SEC. 6. EXTENSION OF BONUS DEPRECIATION. 

13 (a) IN GENERAL.—Paragraph (2) of section 168(k) 

14 of the Internal Revenue Code of 1986 is amended— 

15 (1) by striking ‘‘January 1, 2015’’ in subpara16 graph (A)(iv) and inserting ‘‘January 1, 2016’’, and 

17 (2) by striking ‘‘January 1, 2014’’ each place 

18 it appears and inserting ‘‘January 1, 2015’’. 

19 (b) SPECIAL RULE FOR FEDERAL LONG-TERM CON20 TRACTS.—Clause (ii) of section 460(c)(6)(B) of the Inter21 nal Revenue Code of 1986 is amended by striking ‘‘Janu22 ary 1, 2014 (January 1, 2015’’ and inserting ‘‘January 

23 1, 2015 (January 1, 2016’’. 

24 (c) CONFORMING AMENDMENTS.— 


tkelley on DSK3SPTVN1PROD with BILLS
10 

•S 1085 IS

1 (1) The heading for subsection (k) of section 

2 168 of the Internal Revenue Code of 1986 is amend3 ed by striking ‘‘JANUARY 1, 2014’’ and inserting 

4 ‘‘JANUARY 1, 2015’’. 

5 (2) The heading for clause (ii) of section 

6 168(k)(2)(B) of such Code is amended by striking 

7 ‘‘PRE-JANUARY 1, 2014’’ and inserting ‘‘PRE-JANU8 ARY 1, 2015’’. 

9 (3) Section 168(k)(4)(D) is amended by strik10 ing ‘‘and’’ at the end of clause (ii), by striking the 

11 period at the end of clause (iii) and inserting a 

12 comma, and by adding at the end the following new 

13 clauses: 

14 ‘‘(iv) ‘January 1, 2015’ shall be sub15 stituted for ‘January 1, 2016’ in subpara16 graph (A)(iv) thereof, and 

17 ‘‘(v) ‘January 1, 2014’ shall be sub18 stituted for ‘January 1, 2015’ each place it 

19 appears in subparagraph (A) thereof.’’. 

20 (4) Section 168(l)(4) of such Code is amended 

21 by striking ‘‘and’’ at the end of subparagraph (A), 

22 by redesignating subparagraph (B) as subparagraph 

23 (C), and by inserting after subparagraph (A) the fol24 lowing new subparagraph: 


tkelley on DSK3SPTVN1PROD with BILLS
11 

•S 1085 IS

1 ‘‘(B) by substituting ‘January 1, 2014’ for 

2 ‘January 1, 2015’ in clause (i) thereof, and’’. 

3 (5) Subparagraph (C) of section 168(n)(2) of 

4 such Code is amended by striking ‘‘January 1, 

5 2014’’ and inserting ‘‘January 1, 2015’’. 

6 (6) Subparagraph (D) of section 1400L(b)(2) 

7 of such Code is amended by striking ‘‘January 1, 

8 2014’’ and inserting ‘‘January 1, 2015’’. 

9 (7) Subparagraph (B) of section 1400N(d)(3) 

10 of such Code is amended by striking ‘‘January 1, 

11 2014’’ and inserting ‘‘January 1, 2015’’. 

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

13 this section shall apply to property placed in service after 

14 December 31, 2013, in taxable years ending after such 

15 date. 

16 SEC. 7. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RE17 COVERY FOR QUALIFIED LEASEHOLD IM18 PROVEMENTS, QUALIFIED RESTAURANT 

19 BUILDINGS AND IMPROVEMENTS, AND 

20 QUALIFIED RETAIL IMPROVEMENTS. 

21 (a) IN GENERAL.—Clauses (iv), (v), and (ix) of sec22 tion 168(e)(3)(E) of the Internal Revenue Code of 1986 

23 are each amended by striking ‘‘January 1, 2014’’ and in24 serting ‘‘January 1, 2015’’. 


tkelley on DSK3SPTVN1PROD with BILLS
12 

•S 1085 IS

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

2 this section shall apply to property placed in service after 

3 December 31, 2013. 

Æ 


tkelley on DSK3SPTVN1PROD with BILLS