To amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax on corporations and individuals.

January 7, 2003

Mr. COLLINS introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax on corporations and individuals.

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 `Alternative Minimum Tax Repeal Act of 2003'.

SEC. 2. REPEAL OF ALTERNATIVE MINIMUM TAX ON CORPORATIONS.

(a) IN GENERAL- Subsection (a) of section 55 of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence:

`No tax shall be imposed by this section on any corporation for any taxable year beginning after December 31, 2002, and the tentative minimum tax of any corporation for any such taxable year shall be zero for purposes of this title.'

(b) LIMITATION ON USE OF CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY- Subsection (c) of section 53 of such Code is amended to read as follows:

`(c) LIMITATION-

`(1) IN GENERAL- Except as otherwise provided in this subsection, the credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of--

`(A) the regular tax liability of the taxpayer for such taxable year reduced by the sum of the credits allowable under subparts A, B, D, E, and F of this part, over

`(B) the tentative minimum tax for the taxable year.

`(2) CORPORATIONS- In the case of corporation for any taxable year beginning after December 31, 2002, the limitation under paragraph (1) shall be determined--

`(A) without regard to the last sentence of section 55(a), and

`(B) by taking into account only the applicable percentage of the tentative minimum tax determined in accordance with the following table.

`For taxable years beginning

--The applicable

in calendar year--

--percentage is--

2003

--80

2004

--60

2005

--40

2006

--20

2007 or thereafter

--0.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

SEC. 3. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDIVIDUALS.

(a) REPEAL IN 2011- Subsection (a) of section 55 of the Internal Revenue Code of 1986 is amended by adding at the end the following new flush sentence:

`For purposes of this title, the tentative minimum tax on any taxpayer other than a corporation for any taxable year beginning after December 31, 2012, shall be zero.'.

(b) REDUCTION OF TAX ON INDIVIDUALS PRIOR TO REPEAL-

(1) IMMEDIATE INCREASE IN EXEMPTION AMOUNTS- Paragraph (1) of section 55(d) of such Code is amended--

(A) by striking `$45,000 ($49,000 in the case of taxable years beginning in 2001, 2002, 2003, and 2004)' and inserting `$52,000',

(B) by striking `$33,750 ($37,750 in the case of taxable years beginning in 2001, 2002, 2003, and 2004)' and inserting `$38,000', and

(C) by striking `$22,500' and inserting ` 1/2 the amount applicable under subparagraph (A)'.

(2) ADDITIONAL INCREASES IN EXEMPTION AMOUNTS; REPEAL OF PHASE-OUT OF EXEMPTION AMOUNTS- Paragraph (3) of section 55(d) of such Code is amended to read as follows:

`(3) INCREASES IN EXEMPTION AMOUNTS FOR TAXPAYERS OTHER THAN CORPORATIONS-

`(A) IN GENERAL- The exemption amounts under paragraph (1) for taxable years beginning in any calendar year after 2003 shall be determined by increasing the dollar amounts contained in subparagraphs (A) and (B) of paragraph (1) by the applicable percentage for such calendar year of such dollar amounts.

`(B) APPLICABLE PERCENTAGE- For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table:

`For calendar year--

--The applicable

--percentage is--

2004

--10

2005

--20

2006

--30

2007

--40

2008

--50

2009

--60

2010

--70

2011

--80

2012

--90.

`(C) ROUNDING- If any amount, as increased under subparagraph (A) is not a multiple of $5, such amount shall be increased to the nearest multiple of $5.'

(c) NONREFUNDABLE PERSONAL CREDITS FULLY ALLOWED AGAINST REGULAR TAX LIABILITY-

(1) IN GENERAL- Subsection (a) of section 26 of such Code (relating to limitation based on amount of tax) is amended to read as follows:

`(a) LIMITATION BASED ON AMOUNT OF TAX- The aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of--

`(1) the taxpayer's regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27(a), and

`(2) the tax imposed by section 55(a) for the taxable year.'.

(2) CONFORMING AMENDMENT- Section 904 of such Code is amended by striking subsection (h).

(d) LIMITATION ON USE OF CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY- Subsection (c) of section 53 of such Code, as amended by section 1, is amended by adding at the end the following new paragraph:

`(3) INDIVIDUALS FOR TAXABLE YEARS BEGINNING AFTER 2012- In the case of any taxable year beginning after 2012, the credit allowable under subsection (a) to a taxpayer other than a corporation for any taxable year shall not exceed 90 percent of the excess (if any) of--

`(A) regular tax liability of the taxpayer for such taxable year, over

`(B) the sum of the credits allowable under subparts A, B, D, E, and F of this part.'.

(e) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

END