Small Business Tax Cut Act

Bill: 112-hr-9
Sponsor: Rep. Cantor, Eric [R-VA-7]
Introduced: 2012-03-21 in the House
Policy area: Taxation
Subjects: Income tax deductions
Small business
Wages and earnings

Summary:
action_date: 2012-03-21
text: 
Small Business Tax Cut Act - Amends the Internal Revenue Code to allow domestic businesses a tax deduction for 20% of the lesser of their qualified domestic business income (income effectively connected with a trade or business in the United States) or their taxable income for the taxable year. Limits the amount of such deduction to 50% of the the greater of the W-2 wages (payroll) paid to business non-owners or the sum of the W-2 wages paid to non-owner family members of direct owners (i.e., stockholders), plus any W-2 wages paid to direct owners who have a 10% or less interest in a business.

action_date: 2012-04-10
text: 
Small Business Tax Cut Act - Amends the Internal Revenue Code to allow a qualified small business a tax deduction equal to 20% of the lesser of qualified domestic business income or taxable income. Defines: (1) &quot;qualified small business&quot; as any employer engaged in a trade or business if such employer had fewer than 500 full-time employees in either 2010 or 2011; and (2) &quot;qualified domestic business income&quot; as an amount equal to the excess (if any) of the taxpayer's domestic business gross receipts (i.e., gross receipts effectively connected with a trade or business within the United States) for a taxable year over the sum of the cost of goods sold allocable to such receipts and other expenses, losses, or deductions properly allocable to such receipts.
 
Limits the amount of such deduction to 50% of the greater of: (1) the taxpayer's W-2 wages (payroll) paid to non-owners of the taxpayer's business; or (2) the sum of the W-2 wages paid to individuals who are non-owner family members of direct owners (i.e., stockholders of the business), plus any W-2 wages paid to direct owners who have an ownership interest in the business of 10% or less. 
 
Directs the Secretary of the Treasury to prescribe regulations to carry out this Act, including regulations to prevent a taxpayer that reorganizes from being treated as a qualified small business if such taxpayer would not have been treated as a qualified small business prior to such reorganization.

action_date: 2012-04-19
text: 

(This measure has not been amended since it was reported to the House on April 10, 2012. The summary of that version is repeated here.)

 
Small Business Tax Cut Act - Amends the Internal Revenue Code to allow a qualified small business a tax deduction equal to 20% of the lesser of qualified domestic business income or taxable income. Defines: (1) "qualified small business" as any employer engaged in a trade or business if such employer had fewer than 500 full-time employees in either 2010 or 2011; and (2) "qualified domestic business income" as an amount equal to the excess (if any) of the taxpayer's domestic business gross receipts (i.e., gross receipts effectively connected with a trade or business within the United States) for a taxable year over the sum of the cost of goods sold allocable to such receipts and other expenses, losses, or deductions properly allocable to such receipts.
 
Limits the amount of such deduction to 50% of the greater of: (1) the taxpayer's W-2 wages (payroll) paid to non-owners of the taxpayer's business; or (2) the sum of the W-2 wages paid to individuals who are non-owner family members of direct owners (i.e., stockholders of the business), plus any W-2 wages paid to direct owners who have an ownership interest in the business of 10% or less. 
 
Directs the Secretary of the Treasury to prescribe regulations to carry out this Act, including regulations to prevent a taxpayer that reorganizes from being treated as a qualified small business if such taxpayer would not have been treated as a qualified small business prior to such reorganization.


Legislative actions:
action_date: 2012-04-23
text: Received in the Senate and Read twice and referred to the Committee on Finance.
action_date: 2012-04-19
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2012-04-19
text: On passage Passed by the Yeas and Nays: 235 - 173, 1 Present (Roll no. 177). (text: CR H1990-1991)
action_date: 2012-04-19
text: Passed/agreed to in House: On passage Passed by the Yeas and Nays: 235 - 173, 1 Present (Roll no. 177).(text: CR H1990-1991)
action_date: 2012-04-19
text: On motion to recommit with instructions Failed by recorded vote: 179 - 229 (Roll no. 176). (consideration: CR H2009-2010)
action_date: 2012-04-19
text: The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H2009)
action_date: 2012-04-19
text: DEBATE - The House proceeded with 10 minutes of debate on the Deutch motion to recommit with instructions. The instructions contained in the motion seek to report the same back to the House forthwith with amendments to prevent the tax deduction from allowing companies to ship jobs overseas. It would also prevent the tax deduction from being used on income from prostitution, pornography, drug trafficking, lobbying, golf courses that discriminate based on sex or race, or by taxpayers who violate Iran sanctions. Further, any Member of Congress taking the deduction would have to disclose the deduction amount and type of business income from which it came.
action_date: 2012-04-19
text: Mr. Deutch moved to recommit with instructions to Ways and Means. (consideration: CR H2008-2010; text: CR H2008)
action_date: 2012-04-19
text: DEBATE - Pursuant to the provisions of H. Res. 620, as amended, the House proceeded with 25 minutes of debate on the Levin substitute amendment.
action_date: 2012-04-19
text: DEBATE - Pursuant to the provisions of H.Res. 620, as amended, the House proceeded with 70 minutes of debate on H.R. 9.
action_date: 2012-04-19
text: Rule provides for consideration of H.R. 9 with 1 hour of general debate. Motion to recommit with or without instructions allowed. Measure will be considered read. A specified amendment is in order. The resolution waives all points of order against consideration of the bill. The resolution provides that the amendment in the nature of a substitute, now printed in the bill, shall be considered as adopted. The resolutions waives all points of order against provisions of the bill, as amended. The resolution makes in order the amendment in the nature of a substitute, for 20 minutes of debate, which shall not be subject to amendment.
action_date: 2012-04-19
text: Considered under the provisions of rule H. Res. 620. (consideration: CR H1981-1989, H1990-2010)
action_date: 2012-04-19
text: Rule H. Res. 620 passed House.
action_date: 2012-04-17
text: Rules Committee Resolution H. Res. 620 Reported to House. Rule provides for consideration of H.R. 9 with 1 hour of general debate. Motion to recommit with or without instructions allowed. Measure will be considered read. A specified amendment is in order. The resolution waives all points of order against consideration of the bill. The resolution provides that the amendment in the nature of a substitute, now printed in the bill, shall be considered as adopted. The resolutions waives all points of order against provisions of the bill, as amended. The resolution makes in order the amendment in the nature of a substitute, for 20 minutes of debate, which shall not be subject to amendment.
action_date: 2012-04-10
text: Placed on the Union Calendar, Calendar No. 292.
action_date: 2012-04-10
text: Reported (Amended) by the Committee on Ways and Means. H. Rept. 112-425.
action_date: 2012-04-10
text: Reported (Amended) by the Committee on Ways and Means. H. Rept. 112-425.
action_date: 2012-03-28
text: Ordered to be Reported (Amended) by the Yeas and Nays: 21 - 14.
action_date: 2012-03-28
text: Committee Consideration and Mark-up Session Held.
action_date: 2012-03-21
text: Referred to the House Committee on Ways and Means.
action_date: 2012-03-21
text: Introduced in House
action_date: 2012-03-21
text: Introduced in House