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Text of the AMT Repeal and Tax Freedom Act

This bill was introduced on November 8, 2007, in a previous session of Congress, but was not enacted. The text of the bill below is as of Nov 8, 2007 (Placed on Calendar in the Senate).

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Source: GPO

II

Calendar No. 476

110th CONGRESS

1st Session

S. 2318

IN THE SENATE OF THE UNITED STATES

November 7, 2007

(for himself, Mr. Crapo, Mr. Roberts, Mr. Bunning, and Mr. Smith) introduced the following bill; which was read the first time

November 8, 2007

Read the second time and placed on the calendar

A BILL

To amend the Internal Revenue Code of 1986 to repeal the individual alternative minimum tax and to permanently extend the reductions in income tax rates, and for other purposes.

1.

Short title

This Act may be cited as the AMT Repeal and Tax Freedom Act.

2.

Repeal of individual alternative minimum tax

(a)

In general

Section 55(a) of the Internal Revenue Code of 1986 (relating to alternative minimum tax imposed) is amended by adding at the end the following new flush sentence:

For purposes of this title, the tentative minimum tax on any taxpayer other than a corporation for any taxable year beginning after December 31, 2006, shall be zero.

.

(b)

Modification of limitation on use of credit for prior year minimum tax liability

Subsection (c) of section 53 of the Internal Revenue Code of 1986 (relating to credit for prior year minimum tax liability) is amended to read as follows:

(c)

Limitation

(1)

In general

Except as provided in paragraph (2), the credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of—

(A)

the regular tax liability of the taxpayer for such taxable year reduced by the sum of the credits allowable under subparts A, B, D, E, and F of this part, over

(B)

the tentative minimum tax for the taxable year.

(2)

Taxable years beginning after 2006

In the case of any taxable year beginning after 2006, the credit allowable under subsection (a) to a taxpayer other than a corporation for any taxable year shall not exceed 90 percent of the regular tax liability of the taxpayer for such taxable year reduced by the sum of the credits allowable under subparts A, B, D, E, and F of this part.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2006.

3.

One-time estimated tax safe harbor for alternative minimum tax liability

For purposes of any taxable year beginning in 2006, in the case of any individual with respect to whom there was no liability for the tax imposed under section 55 of the Internal Revenue Code of 1986 for the preceding taxable year—

(1)

the tax shown on the return under section 6654(d)(1)(B)(i) of such Code shall be reduced (but not below zero) by the amount of tax imposed by such section 55 shown on the return,

(2)

the tax for the taxable year under section 6654(d)(2)(B)(i) of such Code (before multiplication by the applicable percentage) shall be reduced (but not below zero) by the tax imposed by such section 55, and

(3)

the amount of tax for the taxable year for purposes of section 6654(e)(1) of such Code shall be reduced (but not below zero) by the amount of tax imposed by such section 55.

4.

Reductions in individual income tax rates made permanent

Section 901 of the Economic Growth and Tax Relief and Reconciliation Act of 2001 (relating to sunset provisions) shall not apply to section 101 of such Act (relating to reduction in income tax rates for individuals).

5.

Permanent reductions in individual capital gains and dividends tax rates

Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (relating to sunset of title) is repealed.

November 8, 2007

Read the second time and placed on the calendar