(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
SEC. 103. REDUCED CORPORATE INCOME TAX RATE FOR 
SMALL CORPORATIONS. 
(a) IN GENERAL.—Subsection (b) of section 11 (re-
lating to tax imposed on corporations) is amended by re-
designating paragraph (2) as paragraph (6) and by strik-
ing paragraph (1) and inserting the following new para-
graphs: 
‘‘(1) FOR TAXABLE YEARS BEGINNING AFTER 
2012.—In the case of taxable years beginning after 
2012, the amount of the tax imposed by subsection 
(a) shall be determined in accordance with the fol-
lowing table: 
‘‘If taxable income is: 
The tax is: 
Not over $50,000 ..........................
15% of taxable income. 
Over 
$50,000 
but 
not 
over 
$75,000.
$7,500, plus 25% of the excess over 
$50,000. 
Over 
$75,000 
but 
not 
over 
$20,000,000.
$13,750, plus 32% of the excess over 
$75,000. 
Over $20,000,000 ..........................
$6,389,750, plus 35% of the excess 
over $20,000,000. 
‘‘(2) FOR TAXABLE YEARS BEGINNING IN 2011 
OR 2012.—In the case of taxable years beginning in 
2011 or 2012, the amount of the tax imposed by 
subsection (a) shall be determined in accordance 
with the following table: 
‘‘If taxable income is: 
The tax is: 
Not over $50,000 ..........................
15% of taxable income.
‘‘If taxable income is: 
The tax is: 
Over 
$50,000 
but 
not 
over 
$75,000.
$7,500, plus 25% of the excess over 
$50,000. 
Over 
$75,000 
but 
not 
over 
$5,000,000.
$13,750, plus 32% of the excess over 
$75,000. 
Over $5,000,000 but not over 
$10,000,000.
$1,589,750, plus 34% of the excess 
over $5,000,000. 
Over $10,000,000 ..........................
$3,289,750, plus 35% of the excess 
over $10,000,000. 
‘‘(3) FOR TAXABLE YEARS BEGINNING IN 2008, 
2009, OR 2010.—In the case of taxable years begin-
ning in 2008, 2009, or 2010, the amount of the tax 
imposed by subsection (a) shall be determined in ac-
cordance with the following table: 
‘‘If taxable income is: 
The tax is: 
Not over $50,000 ..........................
15% of taxable income. 
Over 
$50,000 
but 
not 
over 
$75,000.
$7,500, plus 25% of the excess over 
$50,000. 
Over 
$75,000 
but 
not 
over 
$1,000,000.
$13,750, plus 32% of the excess over 
$75,000. 
Over $1,000,000 but not over 
$10,000,000.
$309,750, plus 34% of the excess 
over $1,000,000. 
Over $10,000,000 ..........................
$3,369,750, plus 35% of the excess 
over $10,000,000. 
‘‘(4) FOR TAXABLE YEARS BEGINNING IN 2005, 
2006, OR 2007.—In the case of taxable years begin-
ning in 2005, 2006, or 2007, the amount of the tax 
imposed by subsection (a) shall be determined in ac-
cordance with the following table: 
‘‘If taxable income is: 
The tax is: 
Not over $50,000 ..........................
15% of taxable income. 
Over 
$50,000 
but 
not 
over 
$75,000.
$7,500, plus 25% of the excess over 
$50,000. 
Over 
$75,000 
but 
not 
over 
$1,000,000.
$13,750, plus 33% of the excess over 
$75,000. 
Over $1,000,000 but not over 
$10,000,000.
$319,000, plus 34% of the excess 
over $1,000,000. 
Over $10,000,000 ..........................
$3,379,000, plus 35% of the excess 
over $10,000,000.
‘‘(5) PHASEOUT OF LOWER RATES FOR CER-
TAIN TAXPAYERS.— 
‘‘(A) GENERAL RULE FOR YEARS BEFORE 
2013.— 
‘‘(i) IN GENERAL.—In the case of tax-
able years beginning before 2013 with re-
spect to a corporation which has taxable 
income in excess of the applicable amount 
for any taxable year, the amount of tax de-
termined under paragraph (1), (2), (3) or 
(4) for such taxable year shall be increased 
by the lesser of (I) 5 percent of such ex-
cess, or (II) the maximum increase 
amount. 
‘‘(ii) MAXIMUM INCREASE AMOUNT.— 
For purposes of clause (i)— 
‘‘In the case of any taxable year
beginning during: 
The applicable 
amount is: 
The maximum 
increase amount 
is: 
2005, 2006, or 2007 ..........................
$1,000,000 
$21,000
2008, 2009, or 2010 ..........................
$1,000,000 
$30,250
2011 or 2012 ......................................
$5,000,000 
$110,250. 
‘‘(B) HIGHER INCOME CORPORATIONS.—In 
the case of a corporation which has taxable in-
come in excess of $20,000,000 ($15,000,000 in 
the case of taxable years beginning before 
2013), the amount of the tax determined under 
the foregoing provisions of this subsection shall
be increased by an additional amount equal to 
the lesser of (i) 3 percent of such excess, or (ii) 
$610,250 ($100,000 in the case of taxable 
years beginning before 2013).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 904(b)(3)(D)(ii) is amended to read 
as follows: 
‘‘(ii) in the case of a corporation, sec-
tion 1201(a) applies to such taxable 
year.’’. 
(2) Section 1201(a) is amended by striking 
‘‘the last 2 sentences of section 11(b)(1)’’ and in-
serting ‘‘section 11(b)(5)’’. 
(3) Section 1561(a) is amended— 
(A) by striking ‘‘the last 2 sentences of 
section 
11(b)(1)’’ 
and 
inserting 
‘‘section 
11(b)(5)’’, and 
(B) by striking ‘‘such last 2 sentences’’ 
and inserting ‘‘section 11(b)(5)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004.