Page:United States Statutes at Large Volume 100 Part 1.djvu/356

 100 STAT. 320

26 USC 1504. 26 USC 132 note. 26 USC 132 note.

26 USC 132. 26 USC 1504.

26 USC 132.

26 USC 132 note.

PUBLIC LAW 99-272—APR. 7, 1986 entitled to no-additional-cost service with respect to air transportation provided by such other member, then, for purposes of applying paragraph (1) of subsection (a) to such no-additional-cost service provided to such employees, such qualified affiliate shall be treated as engaged in the same line of business as such other member. "(B) QUALIFIED AFFILIATE.—For purposes of this paragraph, the term 'qualified affiliate' means any corporation which is predominantly engaged in airline-related services. "(C) AIRLINE-RELATED SERVICES.—For purposes of this paragraph, the term 'airline-related services' means any of the following services provided in connection with air transportation: "(i) Catering. "(ii) Baggage handling, "(iii) Ticketing and reservations. "(iv) Flight planning and weather analysis. "(v) Restaurants and gift shops located at an airport. "(vi) Such other similar services provided to the airline as the Secretary may prescribe. "(D) AFFILIATED GROUP.—For purposes of this paragraph, the term 'affiliated group' has the meaning given such term by section 1504(a).". (2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect on January 1, 1985.

(c) TRANSITIONAL R u L E FOR DETERMINATION OF LiNE OF BUSINESS IN CASE OF AFFILIATED GROUP OPERATING AIRUNE.—If, as of Septem-

ber 12, 1984— (1) an individual— (A) was an employee (within the meaning of section 132 of the Internal Revenue Code of 1954, including subsection (f) thereof) of one member of an affiliated group (as defined in section 1504 of such Code), hereinafter referred to as the "first corporation", and (B) was eligible for no-additional-cost service in the form of air transportation provided by another member of such affiliated group, hereinafter referred to as the "second corporation", (2) at least 50 percent of the individuals performing service for the first corporation were or had been employees of, or had previously performed services for, the second corporation, and (3) the primary business of the affiliated group was air transportation of passengers, then, for purposes of applying paragraphs (1) and (2) of section 132(a) of the Internal Revenue Code of 1954, with respect to no-additionalcost services and qualified employee discounts provided after December 31, 1984, for such individual by the second corporation, the first corporation shall be treated as engaged in the same air transportation line of business as the second corporation. For purposes of the preceding sentence, an employee of the second corporation who is performing services for the first corporation shall also be treated as an employee of the first corporation. (d) SPECIAL RULE FOR SERVICES RELATED TO PROVIDING AlR TRANSPORTATION.—Section 531 of the Tax Reform Act of 1984 is

amended by redesignating subsections (g) and (h) as subsections (h) and (i), respectively, and by inserting after subsection (f) the following new subsection:

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