H. R. _____
IN THE HOUSE OF REPRESENTATIVES
Mr. WELLER (for himself and Mr. NEAL of Massachusetts) introduced the following bill; which was referred to the Committee on _____________
To amend the Internal Revenue Code of 1986 to allow qualified technological equipment and computer software to be expensed, 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 ‘‘Expensing Technology Reform Act of 2001’’.
SEC. 2. EXPENSING OF QUALIFIED TECHNOLOGICAL EQUIPMENT AND COMPUTER SOFTWARE.
(a) IN GENERAL.—Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 179A the following new section:
‘‘SEC. 179B. DEDUCTION FOR QUALIFIED TECHNOLOGICAL EQUIPMENT AND COMPUTER SOFTWARE.
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may elect to treat the cost of any qualified technological property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified technological property is placed in service.
‘‘(b) QUALIFIED TECHNOLOGICAL PROPERTY.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified technological property’ means—
‘‘(A) property to which section 168 applies which is—
‘‘(i) qualified technological equipment (as defined in section 168(i)(2)),
‘‘(ii) any wireless telecommunications equipment,
‘‘(iii) any advanced services equipment, or
‘‘(iv) any network or network system equipment, and
‘‘(B) computer software (as defined in section 197(e)(3)(B)) to which section 167 applies.
‘‘(2) WIRELESS TELECOMMUNICATIONS EQUIPMENT.—The term ‘wireless telecommunications equipment’ means all equipment used in the transmission, reception, coordination, or switching of wireless telecommunications service. For this purpose, ‘wireless telecommunications service’ includes any commercial mobile radio service as defined in title 47 of the Code of Federal Regulations.
‘‘(3) ADVANCED SERVICES EQUIPMENT.—The term ‘advanced services equipment’ means equipment, excluding cabling, used in the provision of Internet or electronic communications access services or support, or which supports access to electronic media and data and associated communications support, provided that such services or support constitute or directly contribute to the provision of advanced telecommunications capability as that term is defined in section 706(c)(1) of the Telecommunications Act of 1996.
‘‘(4) NETWORK OR NETWORK SYSTEM EQUIPMENT.—The term ‘network or network system equipment’ means any information technology equipment, including computer servers, hubs, bridges, switches and routers, which are interconnected so as to enable computers and peripherals to communicate with each other either individually or as a single unit.
‘‘(c) CERTAIN RULES TO APPLY.—Rules similar to the rules of paragraphs (4), (5), and (6) of section 179A shall apply for purposes of this section.’’.
(b) INCLUSION OF COPIERS, DUPLICATING EQUIPMENT, AND OTHER EQUIPMENT.—Clause (iv) of section 168(i)(2)(B) of such Code is amended—
(1) by striking ‘‘copiers, duplicating equipment,’’ in subclause (II),
(2) by adding ‘‘and’’ at the end of subclause (I),
(3) by striking ‘‘, and’’ at the end of subclause (II) and inserting a period, and
(4) by striking subclause (III).
(c) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 263(a) of such Code is amended by striking ‘‘or’’ at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting ‘‘; or’’, and by adding at the end the following new subparagraph:
‘‘(I) expenditures for which a deduction is allowed under section 179B.’’.
(2) Subparagraph (B) of section 312(k)(3) of such Code is amended by striking ‘‘or 179A’’ each place it appears and inserting ‘‘, 179A, or 179B’’.
(3) Subparagraph (C) of section 1245(a)(2) of such Code is amended by inserting ‘‘179B,’’ after ‘‘179A,’’.
(4) The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 179A the following new item:
‘‘Sec. 179B. Deduction for qualified technological equipment and computer software.’’.
(d) EFFECTIVE DATE.—The amendments made by this section shall apply to
property placed in service after the date of the enactment of this Act.