Title: INVEST Act of 2017
Policy area: Taxation

Summary:
Investment in New Ventures and Economic Success Today Act of 2017 or the INVEST Act of 2017
This bill amends the Internal Revenue Code to modify various tax deductions, accounting methods, expensing rules, and cost recovery rules that apply to businesses.
The bill replaces several existing provisions relating to deductions for start-up and organizational business expenses with a consolidated deduction. The new provision applies to all business types, increases the dollar limitations for expenses that may be deducted, and reduces the amortization period for costs that exceed the expensing limit.
With respect to accounting methods, the bill modifies the requirements for using the cash accounting method, inventory accounting rules for small businesses, and accounting rules that apply to certain construction contracts.
The bill modifies the expensing and cost recovery rules to:

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1144 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 1144

   To amend the Internal Revenue Code of 1986 to encourage business 
  creation by allowing faster recovery of start-up and organizational 
   expenses, to simplify accounting methods for small businesses, to 
  expand expensing and provide accelerated cost recovery to encourage 
    investment in new plants and equipment, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 17, 2017

Mr. Thune (for himself and Mr. Roberts) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to encourage business 
  creation by allowing faster recovery of start-up and organizational 
   expenses, to simplify accounting methods for small businesses, to 
  expand expensing and provide accelerated cost recovery to encourage 
    investment in new plants and equipment, and for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Investment in New 
Ventures and Economic Success Today Act of 2017'' or the ``INVEST Act 
of 2017''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--

Sec. 1. Short title; amendment of 1986 Code; table of contents.
         TITLE I--START-UP AND ORGANIZATIONAL BUSINESS EXPENSES

Sec. 101. Unification and expansion of deduction for start-up and 
                            organizational expenditures.
                      TITLE II--ACCOUNTING METHODS

Sec. 201. Modifications of gross receipts test for use of cash method 
                            of accounting by corporations and 
                            partnerships.
Sec. 202. Clarification of inventory accounting rules for small 
                            businesses.
Sec. 203. Modification of rules for capitalization and inclusion in 
                            inventory costs of certain expenses.
Sec. 204. Increase in gross receipts test for construction contract 
                            exception to percentage of completion 
                            method.
     TITLE III--MODIFICATIONS OF EXPENSING AND COST RECOVERY RULES

                      Subtitle A--Expensing Rules

Sec. 301. Modifications of rules for expensing depreciable business 
                            assets.
                    Subtitle B--Cost Recovery Rules

Sec. 311. 50-percent expensing made permanent.
Sec. 312. Modifications of treatment of certain farm property.
Sec. 313. Secretarial requirement to reexamine economic depreciation 
                            for classes of depreciable property.
Sec. 314. Modifications to depreciation limitations on luxury 
                            automobiles and personal use property.
Sec. 315. Reduction in amortization period for intangibles.

         TITLE I--START-UP AND ORGANIZATIONAL BUSINESS EXPENSES

SEC. 101. UNIFICATION AND EXPANSION OF DEDUCTION FOR START-UP AND 
              ORGANIZATIONAL EXPENDITURES.

    (a) Unification.--
            (1) In general.--Subsection (a) of section 195 is amended 
        by inserting ``and organizational'' after ``start-up''.
            (2) Organizational expenditures.--Subsection (c) of section 
        195 is amended by adding at the end the following new 
        paragraph:
            ``(3) Organizational expenditures.--The term 
        `organizational expenditures' means any expenditure which--
                    ``(A) is incident to the creation of a corporation 
                or a partnership,
                    ``(B) is chargeable to capital account, and
                    ``(C) is of a character which, if expended incident 
                to the creation of a corporation or a partnership 
                having an ascertainable life, would be amortizable over 
                such life.''.
            (3) Conforming amendment.--Section 195(b)(1) is amended by 
        inserting ``or organizational'' after ``start-up'' each place 
        it appears.
    (b) Dollar Amounts and Amortization Period.--
            (1) Dollar amounts.--
                    (A) Increase.--Clause (ii) of section 195(b)(1)(A) 
                is amended--
                            (i) by striking ``$5,000'' and inserting 
                        ``$50,000'', and
                            (ii) by striking ``$50,000'' and inserting 
                        ``$100,000''.
                    (B) Adjustment for inflation.--Paragraph (3) of 
                section 195(b) is amended to read as follows:
            ``(3) Adjustment for inflation.--In the case of any taxable 
        year beginning after December 31, 2018, the $50,000 and 
        $100,000 amounts in paragraph (1)(A)(ii) shall each be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                2017' for `calendar year 1992' in subparagraph (B) 
                thereof.
        If any amount as increased under the preceding sentence is not 
        a multiple of $1,000, such amount shall be rounded to the 
        nearest multiple of $1,000.''.
            (2) Amortization period.--Subparagraph (B) of section 
        195(b)(1) is amended by striking ``180-month period'' and 
        inserting ``120-month period''.
            (3) Allocation of limit to initial start-up and 
        organizational expenditures.--Section 195(b) is amended--
                    (A) by striking ``If'' in paragraph (1) and 
                inserting ``Subject to paragraph (4), if'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Special rules for aggregation of initial expenditures 
        of corporations and partnerships.--For purposes of paragraph 
        (1), if, at the time a corporation or partnership first begins 
        the active conduct of one or more trades or businesses, a 
        taxpayer has both start-up expenditures with respect to such 
        trades or businesses and organizational expenditures with 
        respect to such entity--
                    ``(A) any election under paragraph (1) shall cover 
                both such start-up and organizational expenditures,
                    ``(B) the amount of the deduction under paragraph 
                (1)(A) with respect to all such start-up and 
                organizational expenditures shall not exceed the 
                limitation under clause (ii) of paragraph (1)(A), and
                    ``(C) the amount of such start-up and 
                organizational expenditures remaining after such 
                deduction shall be amortized under paragraph (1)(B).''.
    (c) Conforming Amendments.--
            (1)(A) Part VIII of subchapter B of chapter 1 is amended by 
        striking section 248.
            (B) Section 56(g)(4)(D)(ii) is amended by striking 
        ``Sections 173 and 248'' and inserting ``Section 173''.
            (C) Section 170(b)(2)(D)(ii) is amended by striking 
        ``(except section 248)''.
            (D) Section 312(n)(3) is amended by striking ``Sections 173 
        and 248'' and inserting ``Sections 173 and 195''.
            (E) Section 535(b)(3) is amended by striking ``(except 
        section 248)''.
            (F) Section 545(b)(3) is amended by striking ``(except 
        section 248)''.
            (G) Section 834(c)(7) is amended by striking ``(except 
        section 248)''.
            (H) Section 852(b)(2)(C) is amended by striking ``(except 
        section 248)''.
            (I) Section 857(b)(2)(A) is amended by striking ``(except 
        section 248)''.
            (J) Section 1363(b)(3) is amended by striking ``section 
        248'' and inserting ``section 195''.
            (K) Section 1375(b)(1)(B)(i) is amended by striking 
        ``(other than the deduction allowed by section 248, relating to 
        organization expenditures)''.
            (L) The table of sections for part VIII of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        248.
            (2)(A) Section 709 is amended to read as follows:

``SEC. 709. TREATMENT OF SYNDICATION FEES.

    ``No deduction shall be allowed under this chapter to a partnership 
or to any partner of the partnership for any amounts paid or incurred 
to promote the sale of (or to sell) an interest in the partnership.''.
            (B) The item relating to section 709 in the table of 
        sections for part I of subchapter K of chapter 1 is amended by 
        striking ``organization and''.
    (d) Clerical Amendments.--
            (1) The heading of section 195 is amended by striking 
        ``expenditures'' and inserting ``and organizational 
        expenditures''.
            (2) The item relating to section 195 in the table of 
        contents of part VI of subchapter B of chapter 1 is amended to 
        read as follows:

``Sec. 195. Start-up and organizational expenditures.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to elections which first take effect for taxable years beginning 
after December 31, 2017.

                      TITLE II--ACCOUNTING METHODS

SEC. 201. MODIFICATIONS OF GROSS RECEIPTS TEST FOR USE OF CASH METHOD 
              OF ACCOUNTING BY CORPORATIONS AND PARTNERSHIPS.

    (a) Modifications of Gross Receipts Test.--
            (1) In general.--So much of section 448(c) as precedes 
        paragraph (2) is amended to read as follows:
    ``(c) Gross Receipts Test.--
            ``(1) In general.--A corporation or partnership meets the 
        gross receipts test of this subsection for any taxable year if 
        the average annual gross receipts of such entity for the 3-
        taxable-year period ending with the taxable year which precedes 
        such taxable year does not exceed the applicable dollar 
        limit.''.
            (2) Applicable dollar limit.--Subsection (c) of section 448 
        is amended by adding at the end the following new paragraph:
            ``(4) Applicable dollar limit.--
                    ``(A) In general.--The applicable dollar limit is 
                $15,000,000.
                    ``(B) Adjustment for inflation.--In the case of any 
                taxable year beginning after December 31, 2018, the 
                $15,000,000 amount under subparagraph (A) shall be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `calendar year 2017' for 
                        `calendar year 1992' in subparagraph (B) 
                        thereof.
                If any amount as increased under the preceding sentence 
                is not a multiple of $1,000, such amount shall be 
                rounded to the nearest multiple of $1,000.''.
            (3) Change in method of accounting.--Paragraph (7) of 
        section 448(d) is amended--
                    (A) by striking ``In the case of'' and all that 
                follows up to subparagraph (A) and inserting: ``If a 
                taxpayer changes its method of accounting because the 
                taxpayer is prohibited from using the cash receipts and 
                disbursement method of accounting by reason of 
                subsection (a) or is no longer prohibited from using 
                such method by reason of such subsection--'', and
                    (B) by inserting ``and'' at the end of subparagraph 
                (A), by striking ``, and''at the end of subparagraph 
                (B) and inserting a period, and by striking 
                subparagraph (C).
            (4) Conforming amendments.--
                    (A) Paragraph (3) of section 448(b) is amended to 
                read as follows:
            ``(3) Entities satisfying gross receipts test.--Paragraphs 
        (1) and (2) of subsection (a) shall not apply to any 
        corporation or partnership for any taxable year if such entity 
        meets the gross receipts test of subsection (c) for the taxable 
        year.''.
                    (B) Clause (iii) of section 172(b)(1)(E) is amended 
                by inserting ``, applied by substituting `$5,000,000' 
                for `the applicable dollar limit' in paragraph (1) 
                thereof,'' after ``section 448(c)''.
    (b) Application of Modifications to Farming Corporations.--
            (1) In general.--Paragraph (1) of section 447(d) is amended 
        to read as follows:
            ``(1) In general.--A corporation meets the requirements of 
        this subsection for any taxable year with respect to its gross 
        receipts if the corporation meets the gross receipts test of 
        section 448(c) for the taxable year.''.
            (2) Family corporations.--Paragraph (2) of section 447(d) 
        is amended--
                    (A) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) In general.--In the case of a family 
                corporation, in applying section 448(c) for purposes of 
                paragraph (1)--
                            ``(i) paragraph (1) of section 448(c) shall 
                        be applied by substituting the applicable 
                        family corporation limit for the applicable 
                        dollar limit, and
                            ``(ii) the rules of subparagraph (B) shall 
                        apply in computing gross receipts.'',
                    (B) Clause (i) of section 447(d)(2)(B) is amended 
                by striking ``the last sentence of paragraph (1)'' and 
                inserting ``paragraph (2) of section 448(c)'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) Applicable family corporation limit.--
                            ``(i) In general.--The applicable family 
                        corporation limit is $25,000,000.
                            ``(ii) Adjustment for inflation.--In the 
                        case of any taxable year beginning after 
                        December 31, 2018, the $25,000,000 amount under 
                        clause (i) shall be increased by an amount 
                        equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, by 
                                substituting `calendar year 2017' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                        If any amount as increased under the preceding 
                        sentence is not a multiple of $1,000, such 
                        amount shall be rounded to the nearest multiple 
                        of $1,000.''.
            (3) Change in method of accounting.--Section 447(f) is 
        amended--
                    (A) by striking ``In the case of'' and all that 
                follows up to paragraph (1) and inserting: ``If a 
                taxpayer changes its method of accounting because the 
                taxpayer is required to use an accrual method of 
                accounting by reason of subsection (a) or is no longer 
                required to use such method by reason of such 
                subsection--'', and
                    (B) by striking paragraph (2) and inserting:
            ``(2) such change shall be treated as initiated by the 
        taxpayer, and''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 202. CLARIFICATION OF INVENTORY ACCOUNTING RULES FOR SMALL 
              BUSINESSES.

    (a) Clarification of Inventory Rules.--
            (1) In general.--Section 471 is amended by redesignating 
        subsection (c) as subsection (d) and by inserting after 
        subsection (b) the following new subsection:
    ``(c) Small Business Taxpayers Not Required To Use Inventories.--
            ``(1) In general.--A qualified taxpayer shall not be 
        required to use inventories under this section for a taxable 
        year.
            ``(2) Treatment of taxpayers not using inventories.--A 
        qualified taxpayer who is not required under this subsection to 
        use inventories with respect to any property for a taxable year 
        beginning after December 31, 2017, may treat such property as 
        an incidental material or supply for such taxable year.
            ``(3) Qualified taxpayer.--For purposes of this subsection, 
        the term `qualified taxpayer' means, with respect to any 
        taxable year, a taxpayer who meets the gross receipts test of 
        section 448(c) for the taxable year. Such term shall not 
        include a tax shelter prohibited from using the cash receipts 
        and disbursements method of accounting under section 448(a)(3).
            ``(4) Coordination with section 481.--If a taxpayer changes 
        its method of accounting because the taxpayer is not required 
        to use inventories by reason of paragraph (1) or is required to 
        use inventories because such paragraph no longer applies to the 
        taxpayer--
                    ``(A) such change shall be treated as initiated by 
                the taxpayer, and
                    ``(B) such change shall be treated as made with the 
                consent of the Secretary.''.
            (2) Conforming amendment.--Subsection (c) of section 263A 
        is amended by adding at the end the following new paragraph:
            ``(8) Exclusion from inventory rules.--Nothing in this 
        section shall require the use of inventories for any taxable 
        year by a qualified taxpayer (within the meaning of section 
        471(c)(3)) who is not required to use inventories under section 
        471 for such taxable year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 203. MODIFICATION OF RULES FOR CAPITALIZATION AND INCLUSION IN 
              INVENTORY COSTS OF CERTAIN EXPENSES.

    (a) Gross Receipts Exception To Apply to Property Produced by the 
Taxpayer.--Section 263A(b) is amended by striking all that follows 
paragraph (1) and inserting the following new paragraphs:
            ``(2) Property acquired for resale.--Real or personal 
        property described in section 1221(a)(1) which is acquired by 
        the taxpayer for resale.
            ``(3) Exception for small businesses.--This section shall 
        not apply to any property produced or acquired by the taxpayer 
        during any taxable year if the taxpayer is a qualified taxpayer 
        (as defined in section 471(c)(3)) for the taxable year.
            ``(4) Films, sound recordings, books, etc.--For purposes of 
        this subsection, the term `tangible personal property' shall 
        include a film, sound recording, video tape, book, or similar 
        property.
            ``(5) Coordination with section 481.--If a taxpayer changes 
        its method of accounting because this section does not apply to 
        the taxpayer by reason of the exception under paragraph (3) or 
        this section applies to the taxpayer because such exception no 
        longer applies to the taxpayer--
                    ``(A) such change shall be treated as initiated by 
                the taxpayer, and
                    ``(B) such change shall be treated as made with the 
                consent of the Secretary.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 204. INCREASE IN GROSS RECEIPTS TEST FOR CONSTRUCTION CONTRACT 
              EXCEPTION TO PERCENTAGE OF COMPLETION METHOD.

    (a) Increase.--
            (1) In general.--Clause (ii) of section 460(e)(1)(B) is 
        amended to read as follows:
                            ``(ii) who meets the gross receipts test of 
                        section 448(c) for the taxable year in which 
                        such contract is entered into.''.
            (2) Conforming amendments.--
                    (A) Paragraph (2) of section 460(e) is amended to 
                read as follows:
            ``(2) Additional rules for determining gross receipts.--For 
        purposes of paragraph (1)(B)(ii), the Secretary shall prescribe 
        regulations which provide attribution rules similar to section 
        448(c) and which take into account gross receipts of taxpayers 
        who engage in construction contracts through partnerships, 
        joint ventures, and corporations and which would otherwise not 
        be taken into account under such section.''.
                    (B) Section 460(e) is amended by striking paragraph 
                (3) and by redesignating paragraphs (4) through (6) as 
                paragraphs (3) through (5), respectively.
                    (C) The last sentence of section 56(a)(3) is 
                amended by striking ``section 460(e)(6)'' and inserting 
                ``section 460(e)(5)''.
    (b) Coordination With Section 481.--Section 460(e), as amended by 
subsection (a), is amended by adding at the end the following:
            ``(6) Coordination with section 481.--If a taxpayer changes 
        its method of accounting because subsections (a), (b), and (c) 
        (1) and (2) do not apply by reason of the exception under 
        paragraph (1)(B) or such subsections apply to the taxpayer 
        because such exception no longer applies to the taxpayer--
                    ``(A) such change shall be treated as initiated by 
                the taxpayer,
                    ``(B) such change shall be treated as made with the 
                consent of the Secretary, and
                    ``(C) such change shall be permitted only on a cut-
                off basis and no adjustments under section 481(a) shall 
                be made.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to contracts entered into after December 31, 2017, in taxable years 
ending after such date.

     TITLE III--MODIFICATIONS OF EXPENSING AND COST RECOVERY RULES

                      Subtitle A--Expensing Rules

SEC. 301. MODIFICATIONS OF RULES FOR EXPENSING DEPRECIABLE BUSINESS 
              ASSETS.

    (a) Increase in Limitation.--
            (1) Dollar limitation.--Section 179(b)(1) by striking 
        ``$500,000'' and inserting ``$2,000,000''.
            (2) Reduction in limitation.--Section 179(b)(2) is amended 
        by striking ``$2,000,000'' and inserting ``$3,000,000''.
            (3) Inflation adjustments.--
                    (A) In general.--Subparagraph (A) of section 
                179(b)(6) is amended--
                            (i) by striking ``2015'' and inserting 
                        ``2018'', and
                            (ii) by striking ``calendar year 2014'' in 
                        clause (ii) and inserting ``calendar year 
                        2017''.
                    (B) Sport utility vehicles.--Section 179(b)(6) is 
                amended--
                            (i) by striking ``paragraphs (1) and (2)'' 
                        in subparagraph (A) and inserting ``paragraphs 
                        (1), (2), and (5)(A)'', and
                            (ii) by inserting ``(($100 in the case of 
                        any increase in the amount under paragraph 
                        (5)(A))'' after ``$10,000'' in subparagraph 
                        (B).
    (b) Section 179 Property To Include Qualified Real Property.--
            (1) In general.--Subparagraph (B) of section 179(d)(1) is 
        amended to read as follows:
                    ``(B) which is--
                            ``(i) section 1245 property (as defined in 
                        section 1245(a)(3)), or
                            ``(ii) qualified real property (as defined 
                        in subsection (f)), and''.
            (2) Qualified real property defined.--Section 179(f) is 
        amended to read as follows:
    ``(f) Qualified Real Property.--For purposes of this subsection, 
the term `qualified real property' means--
            ``(1) any qualified improvement property described in 
        section 168(k)(3), and
            ``(2) any of the following improvements to nonresidential 
        real property placed in service after the date such property 
        was first placed in service:
                    ``(A) Roofs.
                    ``(B) Heating, ventilation, and air-conditioning 
                property.
                    ``(C) Fire protection and alarm systems.
                    ``(D) Security systems.''.
    (c) Repeal of Exclusion for Certain Property.--The last sentence of 
section 179(d)(1) is amended by inserting ``(other than paragraph (2) 
thereof)'' after ``section 50(b)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years beginning after 
December 31, 2017.

                    Subtitle B--Cost Recovery Rules

SEC. 311. 50-PERCENT EXPENSING MADE PERMANENT.

    (a) In General.--Section 168(k)(2) is amended to read as follows:
            ``(2) Qualified property.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified property' 
                means property--
                            ``(i)(I) to which this section applies 
                        which has a recovery period of 20 years or 
                        less,
                            ``(II) which is computer software (as 
                        defined in section 167(f)(1)(B)) for which a 
                        deduction is allowable under section 167(a) 
                        without regard to this subsection,
                            ``(III) which is water utility property, or
                            ``(IV) which is qualified improvement 
                        property, and
                            ``(ii) the original use of which commences 
                        with the taxpayer.
                    ``(B) Exception for alternative depreciation 
                property.--The term `qualified property' shall not 
                include any property to which the alternative 
                depreciation system under subsection (g) applies, 
                determined--
                            ``(i) without regard to paragraph (7) of 
                        subsection (g) (relating to election to have 
                        system apply), and
                            ``(ii) after application of section 280F(b) 
                        (relating to listed property with limited 
                        business use).
                    ``(C) Special rules.--
                            ``(i) Sale-leasebacks.--For purposes of 
                        clause (ii) and subparagraph (A)(ii), if 
                        property is--
                                    ``(I) originally placed in service 
                                by a person, and
                                    ``(II) sold and leased back by such 
                                person within 3 months after the date 
                                such property was originally placed in 
                                service,
                        such property shall be treated as originally 
                        placed in service not earlier than the date on 
                        which such property is used under the leaseback 
                        referred to in subclause (II).
                            ``(ii) Syndication.--For purposes of 
                        subparagraph (A)(ii), if--
                                    ``(I) property is originally placed 
                                in service by the lessor of such 
                                property,
                                    ``(II) such property is sold by 
                                such lessor or any subsequent purchaser 
                                within 3 months after the date such 
                                property was originally placed in 
                                service (or, in the case of multiple 
                                units of property subject to the same 
                                lease, within 3 months after the date 
                                the final unit is placed in service, so 
                                long as the period between the time the 
                                first unit is placed in service and the 
                                time the last unit is placed in service 
                                does not exceed 12 months), and
                                    ``(III) the user of such property 
                                after the last sale during such 3-month 
                                period remains the same as when such 
                                property was originally placed in 
                                service,
                        such property shall be treated as originally 
                        placed in service not earlier than the date of 
                        such last sale.
                    ``(D) Coordination with section 280f.--For purposes 
                of section 280F--
                            ``(i) Automobiles.--In the case of a 
                        passenger automobile (as defined in section 
                        280F(d)(5)) which is qualified property, the 
                        Secretary shall increase the limitation under 
                        section 280F(a)(1)(A)(i) to an amount equal to 
                        the lesser of--
                                    ``(I) 50 percent of the adjusted 
                                basis of such automobile, or
                                    ``(II) $25,000.
                            ``(ii) Listed property.--The deduction 
                        allowable under paragraph (1) shall be taken 
                        into account in computing any recapture amount 
                        under section 280F(b)(2).
                            ``(iii) Inflation adjustment.--In the case 
                        of any taxable year beginning in a calendar 
                        year after 2018, the $25,000 amount in clause 
                        (i) shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the automobile price 
                                inflation adjustment determined under 
                                section 280F(d)(7)(B)(i) for the 
                                calendar year in which such taxable 
                                year begins by substituting `2017' for 
                                `1987' in subclause (II) thereof.
                        If any increase under the preceding sentence is 
                        not a multiple of $100, such increase shall be 
                        rounded to the nearest multiple of $100.
                    ``(E) Deduction allowed in computing minimum tax.--
                For purposes of determining alternative minimum taxable 
                income under section 55, the deduction under section 
                167 for qualified property shall be determined without 
                regard to any adjustment under section 56.''.
    (b) Conforming Amendments.--
            (1) Amendments related to 50-percent expensing.--
                    (A) Each of the following provisions are amended by 
                striking ``(2)(F)'' each place it appears and inserting 
                ``(2)(D)'':
                            (i) Subparagraphs (A)(i), (B)(i), and 
                        (D)(ii)(I) of section 168(k)(4).
                            (ii) Section 168(k)(7).
                    (B) Section 168(k)(5) is amended--
                            (i) in subparagraph (A)--
                                    (I) by striking ``before January 1, 
                                2020'', and
                                    (II) by striking ``before such 
                                date'',
                            (ii) in subparagraph (B)(ii)--
                                    (I) by inserting ``crop or'' after 
                                ``will have more than one'', and
                                    (II) by inserting ``a marketable 
                                crop or yield of'' after ``begins 
                                bearing'',
                            (iii) by striking ``(2)(G)'' in 
                        subparagraph (E) and inserting ``(2)(E)'', and
                            (iv) by striking subparagraph (F).
                    (C) Section 168(k), as amended by subparagraphs 
                (A)(ii) and (D), is amended by striking paragraph (6) 
                and by redesignating paragraph (7) as paragraph (6).
                    (D) Section 168(k)(7), as in effect before the 
                amendments made by subparagraphs (A)(ii) and (C), is 
                amended by striking ``paragraphs (1) and (2)(F)'' and 
                inserting ``paragraphs (1), (2)(F), and (4)''.
                    (E) Section 168(k) is amended by striking 
                ``Acquired After December 31, 2007, and Before January 
                1, 2020'' in the heading thereof.
                    (F) Subsections (e)(7)(B), (k)(4), (l)(3)(A), 
                (m)(2)(B)(i), and (n)(2)(B)(i) of section 168 are each 
                amended by striking ``bonus depreciation'' each place 
                it appears in the text and headings thereof and 
                inserting ``50-percent expensing''.
            (2) Other conforming amendments.--
                    (A) Section 168(l)(3)(B) is amended by striking 
                ``subsection (k)(2)(D)'' and inserting ``subsection 
                (k)(2)(B)''.
                    (B) Section 168(l)(4) is amended by striking 
                ``subsection (k)(2)(E)'' and inserting ``subsection 
                (k)(2)(C)''.
                    (C) Section 168(l)(5) is amended by striking 
                ``subsection (k)(2)(G)'' and inserting ``subsection 
                (k)(2)(E)''.
                    (D) Section 460(c)(6)(B) is amended by striking 
                ``which--'' and all that follows and inserting ``which 
                has a recovery period of 7 years or less.''.
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to property placed in service after December 31, 2017, in 
        taxable years ending after such date.
            (2) Certain technical corrections.--
                    (A) The amendments made by subsection (b)(1)(B)(ii) 
                shall apply to specified plants planted or grafted 
                after December 31, 2015.
                    (B) The amendment made by subsection (b)(1)(D) 
                shall apply to property placed in service after 
                December 31, 2015, in taxable years ending after such 
                date.

SEC. 312. MODIFICATIONS OF TREATMENT OF CERTAIN FARM PROPERTY.

    (a) Treatment of Certain Farm Property as 5-Year Property.--Clause 
(vii) of section 168(e)(3)(B) is amended by striking ``after December 
31, 2008, and which is placed in service before January 1, 2010''.
    (b) Repeal of Required Use of 150-Percent Declining Balance 
Method.--Section 168(b)(2) is amended by striking subparagraph (B) and 
by redesignating subparagraphs (C) and (D) as subparagraphs (B) and 
(C), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2017, in taxable 
years ending after such date.

SEC. 313. SECRETARIAL REQUIREMENT TO REEXAMINE ECONOMIC DEPRECIATION 
              FOR CLASSES OF DEPRECIABLE PROPERTY.

    (a) In General.--Paragraph (1) of section 168(i) is amended to read 
as follows:
            ``(1) Class life.--
                    ``(A) In general.--Except as provided in this 
                section, the term `class life' means the class life (if 
                any) which would be applicable with respect to any 
                property as of January 1, 1986, under subsection (m) of 
                section 167 (determined without regard to paragraph (4) 
                and as if the taxpayer had made an election under such 
                subsection). The reference in this paragraph to 
                subsection (m) of section 167 shall be treated as a 
                reference to such subsection as in effect on the day 
                before the date of the enactment of the Revenue 
                Reconciliation Act of 1990.
                    ``(B) Secretarial authority to modify rev. proc. 
                87-56.--
                            ``(i) In general.--The Secretary, through 
                        the Office of Tax Analysis and in consultation 
                        with the Bureau of Economic Analysis of the 
                        Department of Commerce, shall conduct an on-
                        going study to--
                                    ``(I) determine, and develop a 
                                schedule of, the economic depreciation 
                                of the major categories of depreciable 
                                property (other than specified 
                                property) to approximate constant 
                                straight-line depreciation, and
                                    ``(II) develop recommendations 
                                regarding the proper economic 
                                depreciation for specified property.
                            ``(ii) Report.--Not later than December 31, 
                        2020, and not less frequently than every 5 
                        years after such date, the Secretary shall 
                        submit to the Committee on Finance of the 
                        Senate and to the Committee on Ways and Means 
                        of the House of Representatives--
                                    ``(I) any schedule developed under 
                                clause (i)(I), and
                                    ``(II) any recommendations 
                                developed under clause (i)(II).
                            ``(iii) Effective date of schedules.--Any 
                        schedule developed under clause (i)(I) and 
                        submitted to Congress under clause (ii) shall 
                        take effect with respect to property placed in 
                        service on or after first day of the first 
                        calendar year beginning at least 1 year after 
                        the date such schedule is submitted.
                    ``(C) Treatment under congressional review act.--
                For purposes of applying chapter 8 of title 5, United 
                States Code, any schedule developed and submitted under 
                subparagraph (B) shall be treated as a major rule.
                    ``(D) Specified property.--For purposes of 
                subparagraph (B), the term `specified property' means--
                            ``(i) any property which is classified 
                        under subsection (e)(3) (other than 
                        subparagraph (C)(v) thereof), or
                            ``(ii) any nonresidential real property, 
                        residential rental property, railroad grading 
                        or tunnel bore, or water utility property.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 314. MODIFICATIONS TO DEPRECIATION LIMITATIONS ON LUXURY 
              AUTOMOBILES AND PERSONAL USE PROPERTY.

    (a) Luxury Automobiles.--
            (1) In general.--280F(a)(1)(A) is amended--
                    (A) by striking ``$2,560'' in clause (i) and 
                inserting ``$10,000'',
                    (B) by striking ``$4,100'' in clause (ii) and 
                inserting ``$16,000'',
                    (C) by striking ``$2,450'' in clause (iii) and 
                inserting ``$9,600'', and
                    (D) by striking ``$1,475'' in clause (iv) and 
                inserting ``$5,760''.
            (2) Conforming amendments.--
                    (A) Clause (ii) of section 280F(a)(1)(B) is amended 
                by striking ``$1,475'' in the text and heading and 
                inserting ``$5,760''.
                    (B) Paragraph (7) of section 280F(d) is amended--
                            (i) by striking ``1988'' in subparagraph 
                        (A) and inserting ``2018'', and
                            (ii) by striking ``1987'' in subparagraph 
                        (B)(i)(II) and inserting ``2017''.
    (b) Removal of Computer Equipment From Listed Property.--
            (1) In general.--Section 280F(d)(4)(A) is amended by 
        inserting ``and'' at the end of clause (iii) and by striking 
        clause (iv).
            (2) Conforming amendment.--Section 280F(d)(4) is amended by 
        striking subparagraph (B) and by redesignating subparagraph (C) 
        as subparagraph (B).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2017, in taxable 
years ending after such date.

SEC. 315. REDUCTION IN AMORTIZATION PERIOD FOR INTANGIBLES.

    (a) In General.--Section 197(a) is amended by adding at the end the 
following new sentence: ``In the case of such an intangible acquired 
after the date of the enactment of the INVEST Act of 2017, the 
preceding sentence shall be applied by substituting `10-year period' 
for `15-year period'.''.
    (b) Application of Anti-Churning Rules.--Section 197(f)(9) is 
amended by adding at the end the following:
                    ``(G) Application to invest act changes.--If 
                subparagraph (A) or (F) would apply to any section 197 
                intangible if--
                            ``(i) `the date of the enactment of the 
                        INVEST Act of 2017' were substituted for `the 
                        date of the enactment of this section' each 
                        place it appears in each such subparagraph, and
                            ``(ii) `May 17, 2017' were substituted for 
                        `July 25, 1991' each place it appears in 
                        subparagraph (A),
                then the last sentence of subsection (a) (relating to 
                10-year amortization) shall not apply to the transferee 
                of such intangible.''.
    (c) Conforming Amendment.--Section 197(e)(4)(D)(i) is amended by 
inserting ``(10 years in the case of a right acquired after the date of 
the enactment of the INVEST Act of 2017)'' after ``15 years''.
    (d) Effective Date.--The amendments made by this section apply to 
acquisitions after the date of the enactment of this Act in taxable 
years ending after such date.
                                 <all>