II

106TH CONGRESS

2D SESSION S. 2431

To amend the Internal Revenue Code of 1986 to allow a credit against

income tax for expenses incurred in teleworking.

IN THE SENATE OF THE UNITED STATES

APRIL 13, 2000

Mr. SANTORUM 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 allow a

credit against income tax for expenses incurred in teleworking.

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 ‘‘Telework Tax Incen5 tive Act’’.

6 SEC. 2. FINDINGS.

7 The Congress finds as follows:

8 (1) Federal, State, and local governments spend

9 billions of dollars annually on the Nation’s transpor10 tation needs.
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1 (2) Congestion on the Nation’s roads costs over

2 $74,000,000,000 annually in lost work time, fuel

3 consumption, and costs of infrastructure and equip4 ment repair.

5 (3) On average on-road-vehicles contribute 30

6 percent of nitrogen oxides emissions.

7 (4) It is estimated that staying at home to work

8 requires 3 times less energy consumption than com9 muting to work.

10 (5) It was recently reported that if an identified

11 10 to 20 percent of commuters switched to tele12 working, 1,800,000 tons of regulated pollutants

13 would be eliminated, 3,500,000,000 gallons of gas

14 would be saved, 3,100,000,000 hours of personal

15 time would be freed up, and maintenance and infra16 structure costs would decrease by $500,000,000 an17 nually because of reduced congestion and reduced

18 vehicle miles traveled.

19 (6) The average American daily commute is 62

20 minutes for a 44-mile round-trip (a total of 6 days

21 per year and 5,808 miles per year).

22 (7) The increase in work from 1969 to 1996,

23 the increase in hours mothers spend in paid work,

24 combined with a shift toward single-parent families

25 resulted in families on average experiencing a de-
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1 crease of 22 hours a week (14 percent) in parental

2 time available outside of paid work they could spend

3 with their children.

4 (8) Companies with teleworking programs have

5 found that teleworking can boost employee produc6 tivity 5 percent to 20 percent.

7 (9) Today 60 percent of the workforce is in8 volved in information work (an increase of 43 per9 cent since 1990) allowing and encouraging decen10 tralization of paid work to occur.

11 (10) In recent years, studies performed in the

12 United States have shown a marked expansion of

13 teleworking, with an estimate of 19,000,000 Ameri14 cans teleworking by the year 2002, 5 times the

15 amount in 1990.

16 SEC. 3. CREDIT FOR TELEWORKING.

17 (a) IN GENERAL.—Subpart B of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of

19 1986 (relating to foreign tax credit, etc.) is amended by

20 adding at the end the following new section:

21 ‘‘SEC. 30B. TELEWORKING CREDIT.

22 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli23 gible taxpayer, there shall be allowed as a credit against

24 the tax imposed by this chapter for the taxable year an
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1 amount equal to the qualified teleworking expenses paid

2 or incurred by the taxpayer during such year.

3 ‘‘(b) MAXIMUM CREDIT.—

4 ‘‘(1) PER TELEWORKER LIMITATION.—The

5 credit allowed by subsection (a) for a taxable year

6 with respect to qualified teleworking expenses paid

7 or incurred by or on behalf of an individual tele8 worker shall not exceed $500.

9 ‘‘(2) REDUCTION FOR TELEWORKING LESS

10 THAN FULL YEAR.—In the case of an individual who

11 is in a teleworking arrangement for less than a full

12 taxable year, the amount referred to paragraph (1)

13 shall be reduced by an amount which bears the same

14 ratio to $500 as the number of months in which

15 such individual is not in a teleworking arrangement

16 bears to 12. For purposes of the preceding sentence,

17 an individual shall be treated as being in a tele18 working arrangement for a month if the individual

19 is subject to such arrangement for any day of such

20 month.

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

22 ‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible

23 taxpayer’ means—
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1 ‘‘(A) in the case of an individual, an indi2 vidual who performs services for an employer

3 under a teleworking arrangement, and

4 ‘‘(B) in the case of an employer, an em5 ployer for whom employees perform services

6 under a teleworking arrangement.

7 ‘‘(2) TELEWORKING ARRANGEMENT.—The term

8 ‘teleworking arrangement’ means an arrangement

9 under which an employee teleworks for an employer

10 not less than 75 days per year.

11 ‘‘(3) QUALIFIED TELEWORKING EXPENSES.—

12 The term ‘qualified teleworking expenses’ means ex13 penses paid or incurred under a teleworking ar14 rangement for furnishings and electronic information

15 equipment which are used to enable an individual to

16 telework.

17 ‘‘(4) TELEWORK.—The term ‘telework’ means

18 to perform work functions, using electronic informa19 tion and communication technologies, thereby reduc20 ing or eliminating the physical commute to and from

21 the traditional worksite.

22 ‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—

23 ‘‘(1) LIABILITY FOR TAX.—The credit allowable

24 under subsection (a) for any taxable year shall not

25 exceed the excess (if any) of—
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1 ‘‘(A) the regular tax for the taxable year,

2 reduced by the sum of the credits allowable

3 under subpart A and the preceding sections of

4 this subpart, over

5 ‘‘(B) the tentative minimum tax for the

6 taxable year.

7 ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.—If

8 the amount of the credit allowable under subsection

9 (a) for any taxable year exceeds the limitation under

10 paragraph (1) for the taxable year, the excess shall

11 be carried to the succeeding taxable year and added

12 to the amount allowable as a credit under subsection

13 (a) for such succeeding taxable year.

14 ‘‘(e) SPECIAL RULES.—

15 ‘‘(1) BASIS REDUCTION.—The basis of any

16 property for which a credit is allowable under sub17 section (a) shall be reduced by the amount of such

18 credit (determined without regard to subsection (d)).

19 ‘‘(2) RECAPTURE.—The Secretary shall, by reg20 ulations, provide for recapturing the benefit of any

21 credit allowable under subsection (a) with respect to

22 any property which ceases to be property eligible for

23 such credit.

24 ‘‘(3) PROPERTY USED OUTSIDE UNITED

25 STATES, ETC., NOT QUALIFIED.—No credit shall be
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1 allowed under subsection (a) with respect to any

2 property referred to in section 50(b) or with respect

3 to the portion of the cost of any property taken into

4 account under section 179.

5 ‘‘(4) ELECTION TO NOT TAKE CREDIT.—No

6 credit shall be allowed under subsection (a) for any

7 expense if the taxpayer elects to not have this sec8 tion apply with respect to such expense.

9 ‘‘(5) DENIAL OF DOUBLE BENEFIT.—No deduc10 tion or credit (other than under this section) shall

11 be allowed under this chapter with respect to any ex12 pense which is taken into account in determining the

13 credit under this section.’’.

14 (b) TECHNICAL AMENDMENT.—Subsection (a) of

15 section 1016 of such Code is amended by striking ‘‘and’’

16 at the end of paragraph (26), by striking the period at

17 the end of paragraph (27) and inserting ‘‘; and’’, and by

18 adding at the end the following new paragraph:

19 ‘‘(28) to the extent provided in section 30B(e),

20 in the case of amounts with respect to which a credit

21 has been allowed under section 30B.’’

22 (c) CLERICAL AMENDMENT.—The table of sections

23 for subpart B of part IV of subchapter A of chapter 1

24 of such Code is amended by adding at the end the fol25 lowing new item:

‘‘Sec. 30B. Teleworking credit.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to amounts paid or incurred after

3 the date of the enactment of this Act, in taxable years

4 ending after such date.

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