I 

111TH CONGRESS 

1ST SESSION H. R. 2963 

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

improving small manufacturers’ computer technology. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 19, 2009 

Mrs. DAHLKEMPER (for herself, Mr. TIM MURPHY of Pennsylvania, Mr. CARNEY, Mr. WELCH, Mr. TONKO, Mr. BRALEY of Iowa, Mr. HONDA, Mr. 

BRIGHT, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. KISSELL, Mr. 

CHILDERS, Ms. FUDGE, Mr. KAGEN, Mr. FATTAH, Mr. BOSWELL, Ms. 

KAPTUR, Mr. MASSA, Mr. ALTMIRE, Mr. SIRES, Mr. CONNOLLY of Virginia, Ms. WASSERMAN SCHULTZ, Mr. MORAN of Virginia, and Mr. DINGELL) 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 

incentives for improving small manufacturers’ computer 

technology. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SMALL MANUFACTURERS’ COMPUTER HARD4 WARE AND SOFTWARE TAX CREDIT IN LIEU 

5 OF EXPENSING. 

6 (a) IN GENERAL.—Subpart D of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 45R. SMALL MANUFACTURERS COMPUTER HARD4 WARE AND SOFTWARE TAX CREDIT. 

5 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

6 small manufacturers’ computer hardware and software 

7 credit determined under this section for the taxable year 

8 is the lesser of— 

9 ‘‘(1) 50 percent of the amount paid or incurred 

10 by the taxpayer during the taxable year for qualified 

11 computer hardware and software property; or 

12 ‘‘(2) $35,000.00. 

13 ‘‘(b) QUALIFIED COMPUTER HARDWARE AND SOFT14 WARE PROPERTY.—For purposes of this section, the term 

15 ‘qualified computer hardware and software property’ 

16 means any computer hardware and software property for 

17 use in any small manufacturer located in the United 

18 States— 

19 ‘‘(1) the original use of which commences with 

20 the taxpayer; 

21 ‘‘(2) which is property of a character subject to 

22 the allowance for depreciation; and 

23 ‘‘(3) which is placed in service by the taxpayer 

24 after the date of the enactment of this section. 


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1 ‘‘(c) COMPUTER HARDWARE.—For purposes of this 

2 section, the term ‘computer hardware’ includes disk 

3 drives, integrated circuits, display screens, cables, 

4 modems, speakers, and printers. 

5 ‘‘(d) COMPUTER SOFTWARE.—For purposes of this 

6 section, the term ‘computer software’ means programs, 

7 programming languages, data that direct the operations 

8 of a computer system or network, enterprise resource 

9 planning software, manufacturing resource planning soft10 ware, materials requirements planning software and soft11 ware designed to enhance Internet capabilities. 

12 ‘‘(e) SMALL MANUFACTURER.—For purposes of this 

13 section: 

14 ‘‘(1) IN GENERAL.—The term ‘small manufac15 turer’ means— 

16 ‘‘(A) any unincorporated business, any 

17 partnership, or for-profit corporation; 

18 ‘‘(B) with respect to a taxable year, any 

19 which employed an average of 50 or fewer em20 ployees on business days during the preceding 

21 calendar year. For purposes of the preceding 

22 sentence, a preceding calendar year may be 

23 taken into account only if the small business 

24 was in existence throughout such year. 


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1 ‘‘(2) SMALL MANUFACTURERS NOT IN EXIST2 ENCE IN PRECEDING TAXABLE YEAR.—In the case 

3 of a small manufacturer which was not in existence 

4 throughout the preceding calendar year, the deter5 mination under paragraph (1) shall be based on the 

6 average number of employees that it is reasonably 

7 expected such employer or sole proprietor will em8 ploy on business days in the current calendar year. 

9 ‘‘(f) CALCULATION OF NUMBER OF EMPLOYEES.— 

10 For purposes of subsection (e), the number of employees 

11 of a subsidiary of a wholly owned corporation includes the 

12 employees of— 

13 ‘‘(1) a parent corporation; and 

14 ‘‘(2) any other subsidiary corporation of that 

15 parent corporation. 

16 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub17 title, if a credit is determined under this section in connec18 tion with any expenditure for any property, the increase 

19 in the basis of such property which would (but for this 

20 subsection) result from such expenditure shall be reduced 

21 by the amount of the credit so determined. 

22 ‘‘(h) TERMINATION.—This section shall not apply 

23 with respect to any property placed in service after Decem24 ber 31, 2011.’’. 


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1 (b) CREDIT TO BE PART OF GENERAL BUSINESS

2 CREDIT.—Section 38(b) of such Code is amended by strik3 ing ‘‘plus’’ at the end of paragraph (34), by striking the 

4 period at the end of paragraph (35) and inserting ‘‘, plus’’, 

5 and by adding at the end the following new paragraph: 

6 ‘‘(36) the small manufacturers’ computer hard7 ware and software credit determined under section 

8 45R(a).’’. 

9 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

10 such Code is amended by adding at the end the following 

11 new subsection: 

12 ‘‘(f) SMALL MANUFACTURERS COMPUTER HARD13 WARE AND SOFTWARE CREDIT.—No deduction shall be al14 lowed for that portion of the expenses otherwise allowable 

15 as a deduction for the taxable year which is equal to the 

16 amount of the credit determined for the taxable year 

17 under section 45R.’’. 

18 (d) ALLOWANCE OF CREDIT AGAINST ALTERNATIVE

19 MINIMUM TAX.—Subparagraph (B) of section 38(c)(4) of 

20 such Code is amended by striking ‘‘and’’ at the end of 

21 clause (vii), by striking the period at the end of clause 

22 (viii) and insert ‘‘, and’’, and by inserting after clause 

23 (viii) the following new clause: 

24 ‘‘(ix) the credit determined under sec25 tion 45R.’’. 


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1 (e) TRANSFERABILITY OF CREDIT.—Nothing in any 

2 law or rule shall be construed to limit the transferability, 

3 through sale and repurchase agreements, of the credit al4 lowed by reason of section 45R. 

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

6 this section shall apply to taxable years ending after De7 cember 31, 2008. 

Æ 


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