To amend the Internal Revenue Code of 1986 to expand the depreciation benefits available to small businesses, and for other purposes.

January 7, 2003

Mr. HERGER (for himself, Mr. WELLER, Mrs. JOHNSON of Connecticut, Mr. CRANE, Mr. LEWIS of Kentucky, Mr. FOLEY, and Mr. MANZULLO) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to expand the depreciation benefits available to small businesses, 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.

This Act may be cited as the `Small Business Expensing Improvement Act of 2003'.

SEC. 2. MODIFICATIONS TO EXPENSING UNDER SECTION 179.

(a) INCREASE OF AMOUNT WHICH MAY BE EXPENSED-

(1) IN GENERAL- Paragraph (1) of section 179(b) of the Internal Revenue Code of 1986 (relating to dollar limitation) is amended to read as follows:

`(1) DOLLAR LIMITATION- The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $75,000.'

(2) INCREASE IN PHASEOUT THRESHOLD- Paragraph (2) of section 179(b) of such Code is amended by striking `$200,000' and inserting `$325,000'.

(3) INFLATION ADJUSTMENT OF DOLLAR AMOUNTS- Subsection (b) of section 179 of such Code is amended by adding at the end the following new paragraph:

`(5) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2003, each dollar amount contained in paragraph (1) or (2) shall 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 2002' for `calendar year 1992' in subparagraph (B) thereof.

If any amount, as adjusted under the preceding sentence, is not a multiple of $1,000 ($10,000 in the case of the dollar amount contained in paragraph (2)), such amount shall be rounded to the nearest multiple of $1,000 or $10,000, as the case may be.'

(b) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2002.

END