I
106TH CONGRESS
2D SESSION
H. R. 4274
To amend the Internal Revenue Code of 1986 to provide that computers
provided to employees for personal use are a nontaxable fringe benefit.
IN THE HOUSE OF REPRESENTATIVES
APRIL 13, 2000
Mr. WELLER (for himself, Mr. Lewis of Georgia, Mr. WATKINS, Mr. SES-
SIONS, Mrs. WILSON, Mr. CAMPBELL, and Mr. NEAL of Massachusetts)
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
that computers provided to employees for personal use
are a nontaxable fringe benefit.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Digital Divide Access
to Technology Act of 2000’’.
SEC. 2. CERTAIN EMPLOYER-PROVIDED COMPUTERS AND
INTERNET ACCESS TREATED AS DE MINIMIS
FRINGE BENEFITS.
(a) IN GENERAL.—Subsection (e) of section 132 of
the Internal Revenue Code of 1986 (relating to certain
fringe benefits) is amended by adding at the end the fol-
lowing new paragraphs:
‘‘(3) INTERNET ACCESS.—
‘‘(A) IN GENERAL.—Internet access pro-
vided by an employer to the employer’s employ-
ees (if it would (but for this paragraph) result
in an inclusion in the employee’s gross income)
shall be treated as a de minimis fringe if the re-
quirements of subparagraph (B) are met.
‘‘(B) 
REQUIREMENTS.—Internet 
access
meets the requirements of this subparagraph
if—
‘‘(i) such access is provided directly by
the employer or pursuant to a contract
which is arranged for or entered into by
the employer with an Internet service pro-
vider, and
‘‘(ii) such access is made available to
substantially all of the employees of the
employer on substantially the same basis.
‘‘(C) CERTAIN
EMPLOYEES
MAY
BE
EX-
CLUDED.—For purposes of subparagraph (B),
there may be excluded from consideration—
‘‘(i) employees who have not com-
pleted 6 months of service,
‘‘(ii) part-time or seasonal employees,
and
‘‘(iii) employees whose principal place
of employment with the employer is outside
of the United States.
‘‘(4) COMPUTERS.—
‘‘(A) IN
GENERAL.—Computers provided
by an employer to the employer’s employees (if
such computers would (but for this paragraph)
result in an inclusion in the employee’s gross
income) shall be treated as a de minimis fringe
if the requirements of subparagraph (B) are
met.
‘‘(B) REQUIREMENTS.—The provision of
computers meets the requirements of this sub-
paragraph if the computers are made available
to substantially all of the employees of the em-
ployer on substantially the same basis (deter-
mined with the application of paragraph
(3)(C)).
‘‘(C) LIMITATION ON EXCLUSION WHERE
OWNERSHIP OF COMPUTER NOT TRANSFERRED
TO EMPLOYEE.—In the case of a computer to
which this paragraph applies and the ownership
of which is not transferred to the employee as
the beginning of the employee’s use, the exclu-
sion under this paragraph for any month shall
be limited to $35.
‘‘(D) LIMITATION ON EXCLUSION WHERE
OWNERSHIP OF COMPUTER IS TRANSFERRED TO
EMPLOYEE.—In the case of a computer to
which this paragraph applies and the ownership
of which is transferred to the employee, the ex-
clusion under this paragraph shall be limited to
$1,260 (reduced by the aggregate exclusion
under subparagraph (C) (if any) with respect to
such computer.
‘‘(E) LIMITATIONS
APPLIED
ON
3-YEAR
BASIS.—In no event shall the aggregate amount
excluded from the gross income of an employee
under this paragraph with respect to computers
provided to such employee from the employer
during the taxable year and the 2 preceding
taxable years exceed $1,260.
‘‘(F) COMPUTER.—For purposes of this
paragraph, the term ‘computer’ includes—
‘‘(i) any computer or peripheral equip-
ment (as defined by section 168(i)(2)(B)),
‘‘(ii) any software which is loaded into
such computer at the time provided to the
employee, and
‘‘(iii) technical support and other inci-
dental benefits provided in connection with
the employer’s computer benefit program.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to computers (as defined in section
132(e)(4)(F) of the Internal Revenue Code of 1986, as
added by this section) and Internet access provided in tax-
able years ending after the date of the enactment of this
Act.
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