HR 1768 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide tax incentives for replacing an automobile with a more fuel-efficient automobile.CommentsClose CommentsPermalink

March 26, 2009CommentsClose CommentsPermalink

Mr. PAUL introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide tax incentives for replacing an automobile with a more fuel-efficient automobile.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. SHORT TITLE.

This Act may be cited as the ‘Energy Efficient and Environmentally Friendly Automobile Tax Credit Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. CREDIT FOR REPLACING AN AUTOMOBILE WITH A MORE FUEL-EFFICIENT AUTOMOBILE.

(a) In General- Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 30D the following new section:CommentsClose CommentsPermalink

‘SEC. 30E. CREDIT FOR REPLACING AN AUTOMOBILE WITH A MORE FUEL-EFFICIENT AUTOMOBILE.

‘(a) In General- In the case of an eligible purchase by an eligible taxpayer of a passenger automobile, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to the lesser of--CommentsClose CommentsPermalink





‘(1) the cost of the passenger automobile, orCommentsClose CommentsPermalink





‘(2) $2,000.CommentsClose CommentsPermalink





‘(b) Eligible Purchase- For purposes of this section--CommentsClose CommentsPermalink





‘(1) IN GENERAL- The term ‘eligible purchase’ means any purchase of a passenger automobile if--CommentsClose CommentsPermalink





‘(A) the taxpayer sells another passenger automobile within a reasonable period surrounding such purchase, andCommentsClose CommentsPermalink





‘(B) the average fuel economy of the purchased automobile is at least 20 percent better than the average fuel economy of the sold automobile.CommentsClose CommentsPermalink





‘(2) PASSENGER AUTOMOBILE- The term ‘passenger automobile’ has the meaning given such term in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.). Such term includes a light truck (within the meaning of such regulations).CommentsClose CommentsPermalink





‘(3) FUEL ECONOMY- Average fuel economy shall be determined as provided in section 30B(h)(2).CommentsClose CommentsPermalink





‘(c) Eligible Taxpayer- For purposes of this section--CommentsClose CommentsPermalink





‘(1) IN GENERAL- The term ‘eligible taxpayer’ means--CommentsClose CommentsPermalink





‘(A) any individual, andCommentsClose CommentsPermalink





‘(B) any qualified business.CommentsClose CommentsPermalink





‘(2) QUALIFIED BUSINESS- The term ‘qualified business’ means any sole proprietorship, partnership, or corporation if--CommentsClose CommentsPermalink





‘(A) at least 40 percent of its total gross income for the taxable year is derived from the active conduct of transporting persons or property for hire, andCommentsClose CommentsPermalink





‘(B) in the case of a partnership or corporation, all of the equity interests in which are held by 1 individual.CommentsClose CommentsPermalink





‘(3) AGGREGATION RULES- All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as 1 person for purposes of paragraph (2).CommentsClose CommentsPermalink





‘(d) Application With Other Credits-CommentsClose CommentsPermalink





‘(1) BUSINESS CREDIT TREATED AS PART OF GENERAL BUSINESS CREDIT- So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).CommentsClose CommentsPermalink





‘(2) PERSONAL CREDIT- The credit allowed under subsection (a) (after the application of paragraph (1)) for any taxable year shall not exceed the excess (if any) of--CommentsClose CommentsPermalink





‘(A) the regular tax liability (as defined in section 26(b)) reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, and 30C, overCommentsClose CommentsPermalink





‘(B) the tentative minimum tax for the taxable year.CommentsClose CommentsPermalink





‘(e) Special Rules-CommentsClose CommentsPermalink





‘(1) EXCEPTION FOR BUSINESS VEHICLES- Except in the case of a qualified business, subsection (a) shall apply only to passenger automobiles substantially all of the use of which is for personal, nonbusiness purposes.CommentsClose CommentsPermalink





‘(2) LIMITATION ON VEHICLES BEING REPLACED- Except in the case of a qualified business, subsection (b)(1)(A) shall apply only to passenger vehicles which were substantially and regularly used by the taxpayer for personal, nonbusiness purposes.CommentsClose CommentsPermalink





‘(3) BASIS REDUCTION- The basis of any passenger automobile for which credit is allowed under subsection (a) shall be reduced by the amount of such credit.’.CommentsClose CommentsPermalink





(b) Technical Amendments-CommentsClose CommentsPermalink





(1) Section 38(b) of such Code is amended by striking ‘plus’ at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting ‘, plus’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(36) the portion of the credit under section 30E (relating to credit for replacing an automobile with a more fuel-efficient automobile) to which section 30E(d)(1) applies.’.CommentsClose CommentsPermalink





(2) Section 55(c)(3) of such Code is amended by inserting ‘30E(d)(2),’ after ‘30C(d)(2),’.CommentsClose CommentsPermalink





(3) The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 30C the following new item:CommentsClose CommentsPermalink





‘Sec. 30E. Credit for replacing an automobile with a more fuel-efficient automobile.’.CommentsClose CommentsPermalink

SEC. 3. DEDUCTION FOR STATE AND LOCAL TAXES IMPOSED ON PURCHASE OF MORE FUEL-EFFICIENT AUTOMOBILES.

Subsection (a) of section 164 of the Internal Revenue Code of 1986 (relating to deduction for taxes) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) State and local taxes imposed on the purchase of any passenger automobile (as defined in section 30E(b)(2)) for which credit is allowed to the taxpayer under section 30E.’.CommentsClose CommentsPermalink

SEC. 4. DEDUCTION FOR INTEREST ON LOANS USED TO PURCHASE MORE FUEL-EFFICIENT AUTOMOBILES.

Paragraph (2) of section 163(h) of the Internal Revenue Code of 1986 (defining personal interest) is amended by striking ‘and’ at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting ‘, and’, and by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(G) any interest paid or accrued on indebtedness incurred to purchase a passenger automobile (as defined in section 30E(b)(2)) for which credit is allowed to the taxpayer under section 30E.’.CommentsClose CommentsPermalink

SEC. 5. EFFECTIVE DATE.

The amendment made by this Act shall apply vehicles purchased after the date of the enactment of this Act in taxable years ending after such date.CommentsClose CommentsPermalink