Us Congress 2023-2024 Regular Session

Us Congress House Bill HB368

Introduced
1/13/23  

Caption

American Innovation Act of 2023 This bill revises the tax treatment of business start-up or organizational expenditures. Specifically, it allows an election to deduct such expenditures in an amount equal to the lesser of the aggregate amount of such expenditures incurred by an active trade of business, or $20,000, reduced by the amount by which such aggregate amount exceeds $120,000. The remaining amount of such expenditures shall be amortized over the 180 month period after the trade or business begins. The bill also revises the tax treatment of partnership syndication fees and start-up net operating losses and tax credits after an ownership change.

Impact

One significant impact of HB 368 is the simplification of the tax treatment of start-up costs, which proponents argue will incentivize entrepreneurship by making business formation less financially burdensome. By allowing for upfront deductions and extended amortization of costs, the bill seeks to foster an environment that encourages new business ventures, which can lead to greater innovation and job creation within the state. The amendments to existing tax laws could make it more attractive for individuals to start new businesses, particularly small enterprises.

Summary

House Bill 368, titled the 'American Innovation Act of 2023', aims to modify the Internal Revenue Code to enhance provisions regarding start-up and organizational expenditures. The bill allows taxpayers to deduct up to $20,000 of start-up expenses for businesses that begin operating after December 31, 2022, with the potential for amortization of any costs exceeding this threshold over a period of 180 months. Furthermore, it provides regulations for the treatment of syndication fees within partnerships, which could affect various forms of business operations.

Contention

However, there are concerns regarding the implications of this bill on tax revenue and potential misuse of the deductions offered. Critics suggest there could be a disparity in how the benefits of such tax provisions are distributed among different types and sizes of businesses. Smaller startups might lack the sophistication to navigate the complexities introduced by the revised tax treatment compared to larger corporations with more resources. Furthermore, the modification of treatment for syndication fees may introduce new challenges and complications for service partnerships, which could lead to unforeseen consequences or legal challenges.

Companion Bills

No companion bills found.

Previously Filed As

US HB108

Small Business Prosperity Act of 2023 This bill modifies the tax deduction for qualified business income to (1) make such deduction permanent, (2) limit to 21% the top tax rate on qualified business income, (3) repeal the limitation on the deduction based on amount of wages paid, and (4) revise the definition of qualified trade or business to mean any trade or business other than the trade of business of performing services as an employee. The bill provides that a change in the organizational structure of a corporation is not a taxable event if there is no change among the owners, their ownership interests, or the assets of the organization, The bill repeals the estate tax after 2022.

US HB4026

To amend the Internal Revenue Code of 1986 to allow certain credits and deductions to be taken as a refundable tax credit by Puerto Rico businesses or residents, and to extend such credits and deductions to possessions of the United States.

US SR37

An original resolution authorizing expenditures by the Committee on Small Business and Entrepreneurship.

US HB34

Assuring Medicare’s Promise Act of 2023 This bill increases net investment income tax revenues by applying such tax to the trade or business income of certain high income taxpayers and includes the increased tax revenues in the Federal Hospital Insurance Trust Fund.

US HB313

Small Business Emergency Savings Accounts Act of 2023 This bill allows a new tax deduction from gross income for amounts paid into a small business emergency savings account. Such savings accounts are established exclusively to pay the qualified disaster and public health emergency expenses of the account beneficiary. The bill defines qualified disaster and public health emergency expenses as disaster loss replacement expenses, disaster recovery operations expenses, and public health emergency expenses.

US HB449

Microloan Transparency and Accountability Act of 2023 This bill modifies reporting requirements related to the Small Business Administration's (SBA) disbursement of certain financial assistance. Specifically, the bill requires the SBA to report certain metrics related to the disbursement of microloans to small businesses, including (1) the number, amount, and percentage of such loans that went into default in the previous year; (2) the extent to which microloans are provided to small businesses in rural areas; and (3) the average size, rate of interest, and amount of fees charged for each microloan.

US HB508

Bring American Companies Home Act This bill requires the Department of the Treasury to establish a program and regulations allowing U.S. persons (U.S. citizens or residents, domestic partnerships or corporations, or estates and trusts) to deduct in the tax year incurred costs of moving inventory, equipment, and supplies used in a trade or business from China to the United States.The bill alsoestablishes a trust fund and appropriates to such fund tariff amounts collected by the United States on goods manufactured in China,appropriates from such trust fund to the general fund of the Treasury amounts equivalent to the reduction in revenue resulting from the tax deduction, andrequires amounts to be transferred between funds at least monthly.

US HB23

Family and Small Business Taxpayer Protection Act This bill rescinds certain unobligated amounts made available to the Internal Revenue Service by the Inflation Reduction Act of 2022 for its enforcement activities and for funding certain Department of the Treasury tax agencies.

US SB46

American Innovation and Manufacturing Act This bill establishes within the Small Business Administration a credit facility to provide financial assistance to investment companies that finance small manufacturing businesses.

US HB393

Modern GI Bill Act This bill authorizes individuals who are entitled to educational assistance under the Post-9/11 GI Bill to apply amounts of such assistance to repay federal student loans for up to 36 months. The bill sets a cap and annual cost-of-living increases for the amount of educational assistance that may be paid to an individual under this bill during FY2024 and the following years.

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