Bringing Business Back Act of 2016

To amend the Internal Revenue Code of 1986 to exclude income attributable to certain real property from gross income. 1. Short title This Act may be cited as the Bringing Business Back Act of 2016 2. Exclusion for income attributable to certain real property (a) In general Part III of subchapter B of chapter 1 139G. Income attributable to qualified real property excluded from gross income (a) In general Gross income shall not include income or gain attributable to qualified real property for any taxable year beginning during the exclusion period. (b) Qualified real property For purposes of this section— (1) In general (A) Definition The term qualified real property (i) which is certified by the State or local zoning authority, and any economic development board, with respect to such property as meeting the requirements of subparagraph (B), and (ii) with respect to which an election has been made (at such time and in such form and manner as the Secretary shall by regulation prescribe) to have this section apply. (B) Requirements Property meets the requirements of this subparagraph if such property— (i) is zoned for commercial use, (ii) has been undeveloped and vacant during the 2-year period ending on the date of certification, and (iii) is located within a qualified census tract. (2) Qualified census tract The term qualified census tract (A) any census tract— (i) which— (I) has an average poverty rate exceeding the national average poverty rate, or (II) has an unemployment rate above the national unemployment rate, and (ii) exhibits another condition of distress, such as deteriorating infrastructure or population decline, or (B) any qualified rural census tract. (3) Qualified rural census tract The term qualified rural census tract (A) which is located in a rural community, (B) which has an unemployment rate of not less than 6 percent, and (C) in which not less than 50 percent of the houses were constructed before 1980. (4) Rules relating to poverty and unemployment rates For purposes of paragraphs (2) and (3), poverty rates shall be determined by using 2010 census data, and unemployment rates shall be determined by reference to the rate of unemployment announced by the Bureau of Labor Statistics of the Department of Labor for the months in the two most recently ended calendar quarters. (5) Economic development board The term economic development board (c) Exclusion period The term exclusion period (d) Special rules For purposes of this section— (1) Subsequent taxpayers Subsection (a) shall only apply to a taxpayer who has an ownership interest in the qualified real property on the first day of the exclusion period with respect to such property. (2) Limitation on application of section An election to have this section apply may only be made once with respect to any property. (3) Tax-exempt use property This section shall not apply to any property which is tax-exempt use property (as defined in section 168(h)). (e) Regulations The Secretary may prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including methods for allocating income and expenses to property and rules to prevent abuse of this section. . (b) Clerical amendment The table of parts for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139F the following new item: Sec. 139G. Income attributable to qualified real property excluded from gross income. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Bringing Business Back Act of 2016 This bill amends the Internal Revenue Code to allow income or gain attributable to certain real property to be excluded from gross income for a one-year period in which the income attributable to the real property exceeds the pre-depreciation expenses attributable to the property. The exclusion applies to real property that has been certified by the state or local zoning authority and any economic development board as: (1) zoned for commercial use, (2) undeveloped and vacant during the two-year period ending on the date of certification, and (3) located within a qualified census tract. A "qualified census tract" is any census tract that: (1) has an average poverty rate exceeding the national average poverty rate or an unemployment rate above the national unemployment rate; and (2) exhibits another condition of distress, such as deteriorating infrastructure or population decline. A census tract is also qualified if it is located in a rural community that: (1) has an unemployment rate of at least 6%, and (2) in which at least 50% of the houses were constructed before 1980.