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is for a use described in such subparagraph), 
such ultimate vendor shall be treated as the 
person (and the only person) who paid such tax, 
but only if such ultimate vendor is registered 
under section 4101. For purposes of this sub-
paragraph, if the sale of gasoline is made by 
means of a credit card, the person extending 
the credit to the ultimate purchaser shall be 
deemed to be the ultimate vendor. 
‘‘(B) TIMING OF CLAIMS.—The procedure 
and timing of any claim under subparagraph 
(A) shall be the same as for claims under sec-
tion 6427(i)(4), except that the rules of section 
6427(i)(3)(B) regarding electronic claims shall 
not apply unless the ultimate vendor has cer-
tified to the Secretary for the most recent quar-
ter of the taxable year that all ultimate pur-
chasers of the vendor covered by such claim are 
certified and entitled to a refund under sub-
paragraph (C) or (D) of subsection (b)(2).’’. 
(b) CREDIT CARD PURCHASES OF DIESEL FUEL OR 
KEROSENE BY STATE AND LOCAL GOVERNMENTS.—Sec-
tion 6427(l)(5)(C) (relating to nontaxable uses of diesel 
fuel, kerosene, and aviation fuel) is amended by adding 
at the end the following new flush sentence: ‘‘For purposes
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of this subparagraph, if the sale of diesel fuel or kerosene 
is made by means of a credit card, the person extending 
the credit to the ultimate purchaser shall be deemed to 
be the ultimate vendor.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2004. 
SEC. 9402. TWO-PARTY EXCHANGES. 
(a) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 32, as amended by this Act, is 
amended by adding after section 4104 the following new 
section: 
‘‘SEC. 4105. TWO-PARTY EXCHANGES. 
‘‘(a) IN GENERAL.—In a two-party exchange, the de-
livering person shall not be liable for the tax imposed 
under section 4081(a)(1)(A)(ii). 
‘‘(b) TWO-PARTY EXCHANGE.—The term ‘two-party 
exchange’ means a transaction, other than a sale, in which 
taxable fuel is transferred from a delivering person reg-
istered under section 4101 as a taxable fuel registrant fuel 
to a receiving person who is so registered where all of the 
following occur: 
‘‘(1) The transaction includes a transfer from 
the delivering person, who holds the inventory posi-
tion for taxable fuel in the terminal as reflected in 
the records of the terminal operator.
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‘‘(2) The exchange transaction occurs before or 
contemporaneous with completion of removal across 
the rack from the terminal by the receiving person. 
‘‘(3) The terminal operator in its books and 
records treats the receiving person as the person 
that removes the taxable fuel across the terminal 
rack for purposes of reporting the transaction to the 
Secretary. 
‘‘(4) The transaction is the subject of a written 
contract.’’. 
(b) CONFORMING AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter A of chapter 
32, as amended by this Act, is amended by adding after 
the item relating to section 4104 the following new item: 
‘‘Sec. 4105. Two-party exchanges.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 9403. SIMPLIFICATION OF TAX ON TIRES. 
(a) IN GENERAL.—Subsection (a) of section 4071 is 
amended to read as follows: 
‘‘(a) IMPOSITION AND RATE OF TAX.—There is here-
by imposed on taxable tires sold by the manufacturer, pro-
ducer, or importer thereof a tax at the rate of 9.4 cents 
(4.7 cents in the case of a biasply tire) for each 10 pounds
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so much of the maximum rated load capacity thereof as 
exceeds 3,500 pounds.’’ 
(b) TAXABLE TIRE.—Section 4072 is amended by re-
designating subsections (a) and (b) as subsections (b) and 
(c), respectively, and by inserting before subsection (b) (as 
so redesignated) the following new subsection: 
‘‘(a) TAXABLE TIRE.—For purposes of this chapter, 
the term ‘taxable tire’ means any tire of the type used 
on highway vehicles if wholly or in part made of rubber 
and if marked pursuant to Federal regulations for high-
way use.’’ 
(c) EXEMPTION FOR TIRES SOLD TO DEPARTMENT 
OF DEFENSE.—Section 4073 is amended to read as fol-
lows: 
‘‘SEC. 4073. EXEMPTIONS. 
‘‘The tax imposed by section 4071 shall not apply to 
tires sold for the exclusive use of the Department of De-
fense or the Coast Guard.’’ 
(d) CONFORMING AMENDMENTS.— 
(1) Section 4071 is amended by striking sub-
section (c) and by moving subsection (e) after sub-
section (b) and redesignating subsection (e) as sub-
section (c).
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(2) The item relating to section 4073 in the 
table of sections for part II of subchapter A of chap-
ter 32 is amended to read as follows: 
‘‘Sec. 4073. Exemptions.’’ 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales in calendar years begin-
ning more than 30 days after the date of the enactment 
of this Act. 
Subtitle E—Small Business 
Expensing 
SEC. 9501. 2-YEAR EXTENSION OF INCREASED EXPENSING 
FOR SMALL BUSINESS. 
Subsections (b), (c), and (d) of section 179 (as 
amended by the Jobs and Growth Tax Relief Reconcili-
ation Act of 2003) are each amended by striking ‘‘2006’’ 
each place it appears and inserting ‘‘2008’’. 
Subtitle F—Alternative Minimum 
Tax Relief 
SEC. 9601. NET OPERATING LOSSES AND FOREIGN TAX 
CREDIT UNDER ALTERNATIVE MINIMUM TAX. 
(a) NET OPERATING LOSSES.— 
(1) IN GENERAL.—Subparagraph (A) of section 
56(d)(1) is amended to read as follows: 
‘‘(A) the amount of such deduction shall 
not exceed the applicable percentage (deter-
mined under paragraph (3)) of the alternative
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minimum taxable income determined without 
regard to such deduction, and’’. 
(2) APPLICABLE PERCENTAGE.—Subsection (d) 
of section 56 is amended by adding at the end the 
following new paragraph: 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1)(A)— 
‘‘For taxable years beginning 
The applicable 
in calendar year— 
percentage is— 
2006, 2007, or 2008 ............................................................
2009 or 2010 .......................................................................
2011 .....................................................................................
2012 .....................................................................................
2013 or thereafter ................................................................ 100.’’
(b) FOREIGN TAX CREDIT.— 
(1) Subsection (a) of section 59 is amended by 
striking paragraph (2) and by redesignating para-
graphs (3) and (4) as paragraphs (2) and (3), re-
spectively. 
(2) Section 53(d)(1)(B)(i)(II) is amended by 
striking ‘‘and if section 59(a)(2) did not apply’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 9602. EXPANSION OF EXEMPTION FROM ALTERNATIVE 
MINIMUM TAX FOR SMALL CORPORATIONS. 
(a) IN GENERAL.—Subparagraphs (A) and (B) of 
section 
55(e)(1) 
are 
each 
amended 
by 
striking