I

103D CONGRESS

2D SESSION H. R. 3923

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

businesses with employees performing services in their residences or

in telecommuting centers.

IN THE HOUSE OF REPRESENTATIVES

MARCH 1, 1994

Mr. BAKER of California (for himself, Mr. DOOLITTLE, and Mr. LEVY) introduced the following bill; which was referred to the Committee on Ways

and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

tax credits to businesses with employees performing services in their residences or in telecommuting centers.

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 ‘‘Telecommuting Tax

5 Credit Act of 1994’’.

6 SEC. 2. TELECOMMUTING TAX CREDIT.

7 (a) GENERAL RULE.—Subpart B of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of
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1 1986 is amended by adding at the end thereof the follow2 ing new section:

3 ‘‘SEC. 30A. TELECOMMUTING TAX CREDIT.

4 ‘‘(a) GENERAL RULE.—In the case of an employer

5 with 1 or more telecommuting employees, there shall be

6 allowed as a credit against the tax imposed by this chapter

7 for the taxable year an amount equal the per employee

8 credit determined for each such employee.

9 ‘‘(b) PER-EMPLOYEE CREDIT.—For purposes of this

10 section—

11 ‘‘(1) RESIDENTIAL TELECOMMUTING EMPLOY12 EES.—The per employee credit determined for any

13 residential telecommuting employee for any taxable

14 year is an amount which bears the same ratio to

15 $500 as—

16 ‘‘(A) the average number of hours per

17 week for which the employee performs services

18 (which are part of the employee’s normal work19 week) in the employee’s residence, bears to

20 ‘‘(B) 40.

21 In no event shall the amount determined under the

22 preceding sentence exceed $500.

23 ‘‘(2) OTHER TELECOMMUTING EMPLOYEES.—

24 The per employee credit determined for any

25 telecommuting employee (other than a residential
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1 telecommuting employee) for any taxable year is an

2 amount which bears the same ratio to $250 as—

3 ‘‘(A) the average number of hours per

4 week for which the employee performs services

5 (which are part of the employee’s normal work6 week) in a telecommuting center, bears to

7 ‘‘(B) 40.

8 In no event shall the amount determined under the

9 preceding sentence exceed $250.

10 ‘‘(3) SPECIAL RULE FOR PART-YEAR EMPLOY11 EES.—In the case of an employee who was not em12 ployed by the taxpayer at all times during the tax13 able year, the dollar amounts set forth in paragraph

14 (1) or (2), whichever is applicable, shall be reduced

15 by a percentage based on the portion of the taxable

16 year during which the employee was not employed by

17 the taxpayer.

18 ‘‘(c) DEFINITIONS.—For purposes of this section—

19 ‘‘(1) TELECOMMUTING EMPLOYEE.—The term

20 ‘telecommuting employee’ means any employee of

21 the taxpayer if, pursuant to an agreement between

22 the taxpayer and the employee, such employee per23 forms services which are part of the employee’s nor24 mal workweek—

25 ‘‘(A) in such employee’s residence, or
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1 ‘‘(B) in a telecommuting center but only if

2 such center is closer to such employee’s resi3 dence than the central worksite of the employer.

4 ‘‘(2) RESIDENTIAL TELECOMMUTING EM5 PLOYEE.—The term ‘residential telecommuting em6 ployee’ means any telecommuting employee described

7 in paragraph (1)(A).

8 ‘‘(3) TELECOMMUTING CENTER.—The term

9 ‘telecommuting center’ means any facility where em10 ployees of 2 or more employers or separate business

11 units of the same employer perform services if such

12 facility is separate from the central worksites of

13 such employers or business units.

14 ‘‘(d) LIMITATION.—The credit allowed by subsection

15 (a) for any taxable year shall not exceed 50 percent of

16 the sum of—

17 ‘‘(1) the regular tax for the taxable year re18 duced by the sum of the credits allowable under sub19 part A and the preceding sections of this subpart,

20 and

21 ‘‘(2) the minimum tax imposed by section 55

22 for the taxable year.’’

23 (b) CLERICAL AMENDMENT.—The table of sections

24 for subpart B of part IV of subchapter A of chapter 1
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1 of such Code is amended by adding at the end thereof

2 the following new item:

‘‘Sec. 30A. Telecommuting tax credit.’’

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

4 this section shall apply to taxable years beginning after

5 the date of the enactment of this Act.

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