S 1500 IS

107th CONGRESS

1st Session

S. 1500

To amend the Internal Revenue Code of 1986 to provide tax and other incentives to maintain a vibrant travel and tourism industry, to keep working people working, and to stimulate economic growth, and for other purposes.

IN THE SENATE OF THE UNITED STATES

October 4, 2001

Mr. KYL (for himself and Mr. MILLER) introduced the following bill; which was read twice and referred to the Committee on Finance

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A BILL

To amend the Internal Revenue Code of 1986 to provide tax and other incentives to maintain a vibrant travel and tourism industry, to keep working people working, and to stimulate economic growth, 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 `Travel America Now Act of 2001'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) Prior to September 11, 2001, more than 19,000,000 Americans were employed in travel and travel-related jobs, with an estimated annual payroll of $171,500,000,000.

(2) In recent years, the travel and tourism industry has grown to be the third largest industry in the United States as measured by retail sales, with over $582,000,000,000 in expenditures, generating over $99,600,000,000 in Federal, State, and local tax revenues in 2000.

(3) In 2000, the travel and tourism industry created a $14,000,000,000 balance of trade surplus for the United States.

(4) The travel and tourism industry and all levels of government are working together to ensure that, following the horrific terrorist attacks on the World Trade Center and the Pentagon on September 11, 2001, travel is safe and secure, and that confidence among travelers is maintained.

(5) Urgent, short-term measures are necessary to keep working people working and to generate cash flow to assist the travel and tourism industry in its ongoing efforts to retain its economic footing.

(6) Increased consumer spending on travel and tourism is essential to revitalizing the United States economy.

(7) The American public should be encouraged to travel for personal, as well as business, reasons as a means of keeping working people working and generating cash flow that can help stimulate a rebound in the Nation's economy.

SEC. 3. PERSONAL TRAVEL CREDIT.

(a) IN GENERAL- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25B the following new section:

`SEC. 25C. PERSONAL TRAVEL CREDIT.

`(a) ALLOWANCE OF CREDIT- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified personal travel expenses which are paid or incurred by the taxpayer on or after the date of the enactment of this section and before January 1, 2002.

`(b) MAXIMUM CREDIT- The credit allowed to a taxpayer under subsection (a) for any taxable year shall not exceed $500 ($1,000, in the case of a joint return).

`(c) QUALIFIED PERSONAL TRAVEL EXPENSES- For purposes of this section--

`(1) IN GENERAL- The term `qualified personal travel expenses' means reasonable expenses in connection with a qualifying personal trip for--

`(A) travel by aircraft, rail, watercraft, or motor vehicle, and

`(B) lodging while away from home at any commercial lodging facility.

Such term does not include expenses for meals, entertainment, amusement, or recreation.

`(2) QUALIFYING PERSONAL TRIP-

`(A) IN GENERAL- The term `qualifying personal trip' means travel within the United States--

`(i) the farthest destination of which is at least 100 miles from the taxpayer's residence,

`(ii) involves an overnight stay at a commercial lodging facility and

`(iii) which is taken on or after the date of the enactment of this section.

`(B) ONLY PERSONAL TRAVEL INCLUDED- Such term shall not include travel if, without regard to this section, any expenses in connection with such travel are deductible in connection with a trade or business or activity for the production of income.

`(3) COMMERCIAL LODGING FACILITY- The term `commercial lodging facility' includes any hotel, motel, resort, rooming house, or campground.

`(d) SPECIAL RULES-

`(1) DENIAL OF CREDIT TO DEPENDENTS- No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins.

`(2) EXPENSES MUST BE SUBSTANTIATED- No credit shall be allowed by subsection (a) unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer's own statement the amount of the expenses described in subsection (c)(1).

`(e) DENIAL OF DOUBLE BENEFIT- No deduction shall be allowed under this chapter for any expense for which credit is allowed under this section.'.

(b) CONFORMING AMENDMENT- The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by

inserting before the item relating to section 26 the following new item:

`Sec. 25C. Personal travel credit.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

SEC. 4. TEMPORARY INCREASE IN DEDUCTION FOR BUSINESS MEALS AND ENTERTAINMENT.

(a) IN GENERAL- Subsection (n) of section 274 of the Internal Revenue Code of 1986 (relating to only 50 percent of meal and entertainment expenses allowed as deduction) is amended by adding at the end the following new paragraph:

`(4) TEMPORARY INCREASE IN LIMITATION- With respect to any expense or item paid or incurred on or after the date of the enactment of this paragraph and before January 1, 2002, paragraph (1) shall be applied by substituting `100 percent' for `50 percent'.'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.

SEC. 5. NET OPERATING LOSS CARRYBACK FOR TRAVEL AND TOURISM INDUSTRY.

(a) IN GENERAL- Paragraph (1) of section 172(b) of the Internal Revenue Code of 1986 (relating to years to which loss may be carried) is amended by adding at the end the following new subparagraph:

`(H) TRAVEL AND TOURISM INDUSTRY LOSSES- In the case of a taxpayer which has a travel or tourism loss (as defined in subsection (j)) for a taxable year that includes any portion of the period beginning on or after September 12, 2001, and ending before January 1, 2002, such travel or tourism loss shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss.'.

(b) SPECIAL RULES FOR TRAVEL AND TOURISM INDUSTRY LOSSES- Section 172 of the Internal Revenue Code of 1986 (relating to net operating loss deduction) is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection:

`(j) RULES RELATING TO TRAVEL AND TOURISM INDUSTRY LOSSES- For purposes of this section--

`(1) IN GENERAL- The term `travel or tourism loss' means the lesser of--

`(A) the amount which would be the net operating loss for the taxable year if only income and deductions attributable to the travel or tourism businesses are taken into account, or

`(B) the amount of the net operating loss for such taxable year.

`(2) TRAVEL OR TOURISM BUSINESS- The term `travel or tourism business' includes the active conduct of a trade or business directly related to travel or tourism, including--

`(A) the provision of commercial transportation (including rentals) or lodging,

`(B) the operation of airports or other transportation facilities or the provision of services or the sale of merchandise within such facilities,

`(C) the provision of services as a travel agent,

`(D) the operation of convention, trade show, or entertainment facilities, and

`(E) the provision of other services as specified by the Secretary.

`(3) COORDINATION WITH SUBSECTION (b)(2)- For purposes of applying subsection (b)(2), a travel or tourism loss for any taxable year shall be treated in a manner similar to the manner in which a specified liability loss is treated.

`(4) ELECTION- Any taxpayer entitled to a 5-year carryback under subsection (b)(1)(H) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(H). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.

`(5) RELATED TAXPAYERS- Under regulations prescribed by the Secretary and at the election of a taxpayer entitled to a 5-year carryback under subsection (b)(1)(H) with respect to a travel or tourism loss, such loss may be credited against the taxable income earned during the 5-year carryback period by any member of a controlled group of corporations (as defined in section 1563(a)) of which the taxpayer is a component or additional member within the meaning of section 1563(b).'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years ending before, on, or after the date of the enactment of this Act.