Title: Prohibiting Incentives for Corporations that Kickout Employees Tax (PICKET) Act
Policy area: Taxation

Summary:
Prohibiting Incentives for Corporations that Kickout Employees Tax (PICKET) Act
This bill amends the Internal Revenue Code to increase the corporate tax rate from 21% to 35% for corporations participating in a labor lockout during the taxable year. A "labor lockout" is a dispute involving a work stoppage, wherein an employer withholds work from its employees in order to gain a concession from them.
The bill also denies certain tax deductions and credits for remuneration (including wages or other benefits) paid by the taxpayer to a temporary replacement worker during a labor lockout.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3544 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3544

To amend the Internal Revenue Code of 1986 to modify the rate of tax on 
corporations participating in labor lockouts and to prohibit deductions 
  and credits for wages and benefits paid to temporary workers during 
                            labor lockouts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            October 3 (legislative day, September 28), 2018

  Mr. Tester 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 modify the rate of tax on 
corporations participating in labor lockouts and to prohibit deductions 
  and credits for wages and benefits paid to temporary workers during 
                            labor lockouts.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prohibiting Incentives for 
Corporations that Kickout Employees Tax (PICKET) Act''.

SEC. 2. RATE OF TAX FOR CORPORATIONS PARTICIPATING IN LABOR LOCKOUTS.

    (a) In General.--Section 11 of the Internal Revenue Code of 1986 is 
amended by redesignating subsections (c) and (d) as subsections (d) and 
(e), respectively, and by inserting after subsection (b) the following 
new subsection:
    ``(c) Exception for Disqualified Corporations.--
            ``(1) In general.--In the case of any corporation 
        participating in a labor lockout during the taxable year, 
        subsection (b) shall be applied by substituting `35 percent' 
        for `21 percent'.
            ``(2) Labor lockout.--For purposes of this subsection, the 
        term `labor lockout' means a labor dispute involving a work 
        stoppage, wherein an employer withholds work from its employees 
        in order to gain a concession from them.''.
    (b) Conforming Amendments.--
            (1) The heading of section 11(d) of the Internal Revenue 
        Code of 1986 (as redesignated by subsection (a)) is amended by 
        striking ``Exceptions'' and inserting ``Other Exceptions''.
            (2) Section 280C(c)(2)(B)(ii)(II) of such Code is amended 
        by inserting ``(section 11(c), in the case of a disqualified 
        domestic subsidiary (as defined in such section))'' after 
        ``section 11(b)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. DENIAL OF DEDUCTION AND CREDITS FOR WAGES AND BENEFITS PAID TO 
              TEMPORARY WORKERS DURING A LABOR LOCKOUT.

    (a) Deduction.--
            (1) In general.--Part IX of subchapter B of chapter 1 of 
        the Internal Revenue Code of 1986 is amended by adding at the 
        end the following new subsection:

``SEC. 280I. REMUNERATION PAID DURING LABOR LOCKOUTS.

    ``(a) In General.--No deduction shall be allowed for any 
remuneration paid by the taxpayer (including wages or other benefits) 
to any temporary replacement worker during a labor lockout (as defined 
in section 11(c)(2)).
    ``(b) Temporary Replacement Worker.--For purposes of subsection 
(a), the term `temporary replacement worker' means any individual 
compensated to perform duties normally performed by employees from whom 
work is withheld under the labor lockout.''.
            (2) Clerical amendment.--The table of sections for part IX 
        of subchapter B of chapter 1 of such Code is amended by adding 
        at the end the following new item:

``Sec. 280I. Remuneration paid during labor lockouts.''.
    (b) Credits.--
            (1) Research credit.--Section 41(b)(2)(D) of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new clause:
                            ``(iv) Exclusion for wages paid during a 
                        labor lockout.--The term `wages' shall not 
                        include any amount paid to a temporary 
                        replacement worker (as defined in section 280I) 
                        during a labor lockout (as defined in section 
                        11(c)(2)).''.
            (2) Work opportunity credit.--Section 51(c) of such Code is 
        amended by adding at the end the following new paragraph:
            ``(6) Exclusion for wages paid during a labor lockout.--The 
        term `wages' shall not include any amount paid to a temporary 
        replacement worker (as defined in section 280I) during a labor 
        lockout (as defined in section 11(c)(2)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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