119-s1613

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1613 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1613

To amend the Internal Revenue Code of 1986 to increase the limitations 
for deductible new business expenditures, to consolidate provisions for 
 start-up and organizational expenditures, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 May 6, 2025

 Ms. Rosen (for herself, Mrs. Shaheen, Ms. Baldwin, Mr. Wyden, Mr. 
 Blumenthal, Ms. Klobuchar, Mr. Heinrich, Mr. Coons, Ms. Slotkin, Mr. 
 Gallego, and Ms. Alsobrooks) introduced the following bill; which was 
 read twice and referred to the Committee on Finance

_______________________________________________________________________

 A BILL

To amend the Internal Revenue Code of 1986 to increase the limitations 
for deductible new business expenditures, to consolidate provisions for 
 start-up and organizational expenditures, 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 ``Tax Relief for New Businesses Act''.

SEC. 2. NEW BUSINESS EXPENDITURES.

    (a) Consolidation of Deduction for Start-Up and Organizational 
Expenditures.--

    (1) In general.--

Section 195

    (a) of the Internal Revenue 
 Code of 1986 is amended by inserting ``or organizational'' 
 after ``start-up''.

    (2) Organizational expenditures.--Subsection
            (c) of 

section 195 of the Internal Revenue Code of 1986 is amended by adding 
 at the end the following new paragraph:
 ``

    (3) Organizational expenditures.--The term 
 `organizational expenditures' means any expenditure which--
 ``
        (A) is incident to the creation of a corporation 
 or a partnership,
 ``
        (B) is chargeable to capital account, and
 ``
            (C) is of a character which, if expended incident 
 to the creation of a corporation or a partnership 
 having a limited life, would be amortizable over such 
 life.''.

    (3) Conforming amendments.--
        (A) Section 195

    (b)

    (1) is amended--
            (i) by striking ``with respect to any 
 start-up expenses'' and inserting ``with 
 respect to any active trade or business'',
            (ii) by striking ``the amount of start-up 
 expenditures with respect to'' in subparagraph
        (A)
            (i) thereof and inserting ``the aggregate 
 amount of start-up and organizational 
 expenditures paid in connection with'', and
            (iii) by adding at the end the following 
 flush sentence:
 ``In the case of a partnership or S corporation, the election 
 under the preceding sentence shall be made at the entity 
 level.''.
        (B) Section 195

    (b)

    (2) of such Code is amended--
            (i) by striking ``amortization period.--In 
 any case'' and inserting the following: 
 ``amortization period.--
 ``
        (A) In general.--In any case'', and
            (ii) by adding at the end the following new 
 subparagraph:
 ``
        (B) Special partnership rule.--In the case of a 
 partnership or S corporation, subparagraph
        (A) shall be 
 applied at the entity level.''.
            (C) Section 195

    (b) of such Code is amended by 
 striking paragraph

    (3) .
            (D) 
            (i) Part VIII of subchapter B of chapter 1 of 
 such Code is amended by striking 

section 248 (and by 
 striking the item relating to such section in the table 
 of sections for such part).
            (ii) Section 170

    (b)

    (2)
            (C) 
            (ii) of such Code is 
 amended by striking ``(except 

section 248)''.
            (iii) Section 312

    (n)

    (3) of such Code is amended by 
 striking ``Sections 173 and 248'' and inserting 
 ``

Section 173''.
            (iv) Section 535

    (b)

    (3) of such Code is amended by 
 striking ``(except 

section 248)''.
            (v) Paragraphs

    (3) and

    (4) of 

section 545

    (b) of 
 such Code are each amended by striking ``(except 
 

section 248)''.
            (vi) Section 834
            (c) (7) of such Code is amended by 
 striking ``(except 

section 248)''.
            (vii) Section 852

    (b)

    (2)
            (C) of such Code is amended 
 by striking ``(except 

section 248)''.
            (viii) Section 857

    (b)

    (2)
        (A) of such Code is amended 
 by striking ``(except 

section 248)''.
            (ix) Section 1363

    (b) of such Code is amended by 
 inserting ``and'' at the end of paragraph

    (2) , by 
 striking paragraph

    (3) , and by redesignating paragraph

    (4) as paragraph

    (3) .
            (x) Section 1375

    (b)

    (1)
        (B)
            (i) of such Code is 
 amended by striking ``(other than the deduction allowed 
 by 

section 248, relating to organization 
 expenditures)''.
        (E)
            (i) Section 709 of such Code is amended to read 
 as follows:

``

SEC. 709. TREATMENT OF SYNDICATION FEES.

 ``No deduction shall be allowed under this chapter to a partnership 
or to any partner of the partnership for any amounts paid or incurred 
to promote the sale of (or to sell) an interest in the partnership.''.
            (ii) The item relating to 

section 709 in the table 
 of sections for part I of subchapter K of chapter 1 of 
 such Code is amended to read as follows:

``

Sec. 709. Treatment of syndication fees.''.
        (F) The heading of 

section 195 of such Code (and 
 the item relating to such section in the table of 
 sections for part VI of subchapter B of chapter 1 of 
 such Code) are each amended by inserting ``and 
 organizational'' after ``Start-up''.

    (b) Increase in Limitation.--Clause
            (ii) of 

section 195

    (b)

    (1)
        (A) of 
the Internal Revenue Code of 1986 is amended--

    (1) by striking ``$5,000'' and inserting ``$50,000'', and

    (2) by striking ``$50,000'' and inserting ``$150,000''.
            (c) Application of Net Operating Loss Rules.--

Section 172 of the 
Internal Revenue Code of 1986 is amended by redesignating subsection

    (g) as subsection

    (h) and by inserting after subsection

    (f) the 
following new subsection:
 ``

    (g) Special Rules for Start-Up and Organizational Expenditures.--
 ``

    (1) In general.--In the case of a taxpayer making an 
 election under this subsection--
 ``
        (A) this section shall be applied separately to 
 start-up and organizational net operating losses and 
 other net operating losses,
 ``
        (B) in applying this section to start-up and 
 organizational net operating losses--
 ``
            (i) subsection

    (a)

    (2)
        (B) shall be applied 
 by substituting `100 percent' for `80 percent' 
 in clause
            (i) thereof, and
 ``
            (ii) subsection

    (b)

    (2)
            (C) shall not 
 apply, and
 ``
            (C) in applying this section to other net 
 operating losses, for purposes of subsections

    (a)

    (2)
        (B)
            (ii) 
            (I) and

    (b)

    (2) , taxable income shall be 
 reduced by the amount of the deduction allowed under 
 this section with respect to start-up and 
 organizational net operating losses.
 ``

    (2) Start-up and organizational net operating loss.--For 
 purposes of this section, the term `start-up and organizational 
 net operating loss' means the amount which would be a net 
 operating loss if the only deduction taken into account were 
 the deduction allowed under 

section 195.
 ``

    (3) Other net operating losses.--For purposes of this 
 section, the term `other net operating loss' means the net 
 operating loss determined without regard to the deduction 
 allowed under 

section 195.
 ``

    (4) Election.--An election under this section shall be 
 made at such time and in such form and manner as the Secretary 
 shall prescribe. Such an election, once made, shall be 
 irrevocable.''.
            (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred in taxable years beginning after 
December 31, 2025.
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