HR 159 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction against individual income tax for interest on indebtedness and for State and local sales and excise taxes with respect to the purchase of certain motor vehicles.CommentsClose CommentsPermalink

January 6, 2009CommentsClose CommentsPermalink

Mr. PASCRELL (for himself, Mr. LATOURETTE, Mr. VAN HOLLEN, Mr. SIRES, Mr. LOBIONDO, Ms. JACKSON-LEE of Texas, Mr. MANZULLO, Mr. CONYERS, Mr. MCKEON, Mr. PAUL, Mr. RUPPERSBERGER, Mr. FARR, Mr. BRADY of Pennsylvania, Mrs. MYRICK, Mr. REICHERT, Mr. AL GREEN of Texas, Mr. PLATTS, Mr. KAGEN, Mr. CAMPBELL, Mr. MOLLOHAN, and Mr. HOLT) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction against individual income tax for interest on indebtedness and for State and local sales and excise taxes with respect to the purchase of certain motor vehicles.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. ABOVE-THE-LINE DEDUCTION FOR INTEREST ON INDEBTEDNESS WITH RESPECT TO THE PURCHASE OF CERTAIN MOTOR VEHICLES.

(a) In General- Paragraph (2) of section 163(h) of the Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(1) by striking ‘and’ at the end of subparagraph (E),CommentsClose CommentsPermalink





(2) by striking the period at the end of subparagraph (F) and inserting ‘, and’, andCommentsClose CommentsPermalink





(3) by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(G) any qualified motor vehicle interest (within the meaning of paragraph (5)).’.CommentsClose CommentsPermalink





(b) Qualified Motor Vehicle Interest- Section 163(h) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) QUALIFIED MOTOR VEHICLE INTEREST- For purposes of this subsection--CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified motor vehicle interest’ means any interest which is paid or accrued during the taxable year on any indebtedness which--CommentsClose CommentsPermalink





‘(i) is incurred after November 12, 2008, and before January 1, 2010, in acquiring any qualified motor vehicle of the taxpayer, andCommentsClose CommentsPermalink





‘(ii) is secured by such qualified motor vehicle.CommentsClose CommentsPermalink





Such term also includes any indebtedness secured by such qualified motor vehicle resulting from the refinancing of indebtedness meeting the requirements of the preceding sentence (or this sentence); but only to the extent the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness.CommentsClose CommentsPermalink





‘(B) DOLLAR LIMITATION- The aggregate amount of indebtedness treated as described in subparagraph (A) for any period shall not exceed $49,500 ($24,750 in the case of a separate return by a married individual).CommentsClose CommentsPermalink





‘(C) INCOME LIMITATION- The amount otherwise treated as interest under subparagraph (A) for any taxable year (after the application of subparagraph (B)) shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so treated as--CommentsClose CommentsPermalink





‘(i) the excess (if any) of--CommentsClose CommentsPermalink





‘(I) the taxpayer’s modified adjusted gross income for such taxable year, overCommentsClose CommentsPermalink





‘(II) $125,000 ($250,000 in the case of a joint return), bears toCommentsClose CommentsPermalink





‘(ii) $10,000.CommentsClose CommentsPermalink





For purposes of the preceding sentence, the term ‘modified adjusted gross income’ means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.CommentsClose CommentsPermalink





‘(D) QUALIFIED MOTOR VEHICLE- The term ‘qualified motor vehicle’ means a passenger automobile (within the meaning of section 30B(h)(3)) or a light truck (within the meaning of such section)--CommentsClose CommentsPermalink





‘(i) which is acquired for use by the taxpayer and not for resale after November 12, 2008, and before January 1, 2010,CommentsClose CommentsPermalink





‘(ii) the original use of which commences with the taxpayer, andCommentsClose CommentsPermalink





‘(iii) which has a gross vehicle weight rating of not more than 8,500 pounds.’.CommentsClose CommentsPermalink





(c) Deduction Allowed Above-the-Line- Section 62(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (21) the following new paragraph:CommentsClose CommentsPermalink





‘(22) QUALIFIED MOTOR VEHICLE INTEREST- The deduction allowed under section 163 by reason of subsection (h)(2)(G) thereof.’.CommentsClose CommentsPermalink





(d) Reporting of Qualified Motor Vehicle Interest-CommentsClose CommentsPermalink





(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 6050X. RETURNS RELATING TO QUALIFIED MOTOR VEHICLE INTEREST RECEIVED IN TRADE OR BUSINESS FROM INDIVIDUALS.

‘(a) Qualified Motor Vehicle Interest- Any person--CommentsClose CommentsPermalink





‘(1) who is engaged in a trade or business, andCommentsClose CommentsPermalink





‘(2) who, in the course of such trade or business, receives from any individual interest aggregating $600 or more for any calendar year on any indebtedness secured by a qualified motor vehicle (as defined in section 163(h)(6)(D)),CommentsClose CommentsPermalink





shall make the return described in subsection (b) with respect to each individual from whom such interest was received at such time as the Secretary may by regulations prescribe.CommentsClose CommentsPermalink





‘(b) Form and Manner of Returns- A return is described in this subsection if such return--CommentsClose CommentsPermalink





‘(1) is in such form as the Secretary may prescribe,CommentsClose CommentsPermalink





‘(2) contains--CommentsClose CommentsPermalink





‘(A) the name and address of the individual from whom the interest described in subsection (a)(2) was received,CommentsClose CommentsPermalink





‘(B) the amount of such interest received for the calendar year, andCommentsClose CommentsPermalink





‘(C) such other information as the Secretary may prescribe.CommentsClose CommentsPermalink





‘(c) Application to Governmental Units- For purposes of subsection (a)--CommentsClose CommentsPermalink





‘(1) TREATED AS PERSONS- The term ‘person’ includes any governmental unit (and any agency or instrumentality thereof).CommentsClose CommentsPermalink





‘(2) SPECIAL RULES- In the case of a governmental unit or any agency or instrumentality thereof--CommentsClose CommentsPermalink





‘(A) subsection (a) shall be applied without regard to the trade or business requirement contained therein, andCommentsClose CommentsPermalink





‘(B) any return required under subsection (a) shall be made by the officer or employee appropriately designated for the purpose of making such return.CommentsClose CommentsPermalink





‘(d) Statements To Be Furnished to Individuals With Respect to Whom Information Is Required- Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing--CommentsClose CommentsPermalink





‘(1) the name, address, and phone number of the information contact of the person required to make such return, andCommentsClose CommentsPermalink





‘(2) the aggregate amount of interest described in subsection (a)(2) received by the person required to make such return from the individual to whom the statement is required to be furnished.CommentsClose CommentsPermalink





The written statement required under the preceding sentence shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made.CommentsClose CommentsPermalink





‘(e) Returns Which Would Be Required To Be Made by 2 or More Persons- Except to the extent provided in regulations prescribed by the Secretary, in the case of interest received by any person on behalf of another person, only the person first receiving such interest shall be required to make the return under subsection (a).’.CommentsClose CommentsPermalink





(2) AMENDMENTS RELATING TO PENALTIES-CommentsClose CommentsPermalink





(A) Section 6721(e)(2)(A) of such Code is amended by striking ‘or 6050L’ and inserting ‘6050L, or 6050X’.CommentsClose CommentsPermalink





(B) Section 6722(c)(1)(A) of such Code is amended by striking ‘or 6050L(c)’ and inserting ‘6050L(c), or 6050X(d)’.CommentsClose CommentsPermalink





(C) Subparagraph (B) of section 6724(d)(1) of such Code is amended by redesignating clauses (xvi) through (xxiii) as clauses (xvii) through (xxiv), respectively, and by inserting after clause (xv) the following new clause:CommentsClose CommentsPermalink





‘(xvi) section 6050X (relating to returns relating to qualified motor vehicle interest received in trade or business from individuals),’.CommentsClose CommentsPermalink





(D) Paragraph (2) of section 6724(d) of such Code is amended by striking the period at the end of subparagraph (EE) and inserting a comma, by striking the period at the end of subparagraph (FF) and inserting ‘, or’, and by inserting after subparagraph (FF) the following new subparagraph:CommentsClose CommentsPermalink





‘(GG) section 6050X(d) (relating to returns relating to qualified motor vehicle interest received in trade or business from individuals).’.CommentsClose CommentsPermalink





(3) CLERICAL AMENDMENT- The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to section 6050W the following new item:CommentsClose CommentsPermalink





‘Sec. 6050X. Returns relating to qualified motor vehicle interest received in trade or business from individuals.’.CommentsClose CommentsPermalink

SEC. 2. ABOVE-THE-LINE DEDUCTION FOR STATE AND LOCAL SALES TAX AND EXCISE TAX ON THE PURCHASE OF CERTAIN MOTOR VEHICLES.

(a) In General- Subsection (a) of section 164 of the Internal Revenue Code of 1986 is amended by inserting after paragraph (5) the following new paragraph:CommentsClose CommentsPermalink





‘(6) Qualified motor vehicle taxes.’.CommentsClose CommentsPermalink





(b) Qualified Motor Vehicle Taxes- Subsection (b) of section 164 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) QUALIFIED MOTOR VEHICLE TAXES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this section, the term ‘qualified motor vehicle taxes’ means any State or local sales or excise tax imposed on the purchase of a qualified motor vehicle (as defined in section 163(h)(6)(D)).CommentsClose CommentsPermalink





‘(B) INCOME LIMITATION- The amount otherwise taken into account under subparagraph (A) for any taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so treated as--CommentsClose CommentsPermalink





‘(i) the excess (if any) of--CommentsClose CommentsPermalink





‘(I) the taxpayer’s modified adjusted gross income for such taxable year, overCommentsClose CommentsPermalink





‘(II) $125,000 ($250,000 in the case of a joint return), bears toCommentsClose CommentsPermalink





‘(ii) $10,000.CommentsClose CommentsPermalink





For purposes of the preceding sentence, the term ‘modified adjusted gross income’ means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.CommentsClose CommentsPermalink





‘(C) QUALIFIED MOTOR VEHICLE TAXES NOT INCLUDED IN COST OF ACQUIRED PROPERTY- The last sentence of subsection (a) shall not apply to any qualified motor vehicle taxes.CommentsClose CommentsPermalink





‘(D) COORDINATION WITH GENERAL SALES TAX- This paragraph shall not apply in the case of a taxpayer who makes an election under paragraph (5) for the taxable year.’.CommentsClose CommentsPermalink





(c) Conforming Amendments- Paragraph (5) of section 163(h) of the Internal Revenue Code of 1986, as added by section 1, is amended--CommentsClose CommentsPermalink





(1) by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(E) EXCLUSION- If the indebtedness described in subparagraph (A) includes the amounts of any State or local sales or excise taxes paid or accrued by the taxpayer in connection with the acquisition of a qualified motor vehicle, the aggregate amount of such indebtedness taken into account under such subparagraph shall be reduced, but not below zero, by the amount of any such taxes for which a deduction is allowed under section 164(a) by reason of paragraph (6) thereof.’, andCommentsClose CommentsPermalink





(2) by inserting ‘, after the application of subparagraph (E),’ after ‘for any period’ in subparagraph (B).CommentsClose CommentsPermalink





(d) Deduction Allowed Above-the-Line- Section 62(a) of the Internal Revenue Code of 1986, as amended by section 1, is amended by inserting after paragraph (22) the following new paragraph:CommentsClose CommentsPermalink





‘(23) QUALIFIED MOTOR VEHICLE TAXES- The deduction allowed under section 164 by reason of subsection (a)(6) thereof.’.CommentsClose CommentsPermalink