Page:United States Statutes at Large Volume 95.djvu/275

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 249

SEC. 223. SUSPENSION OP REGULATIONS RELATING TO ALLOCATION 26 USC 174 UNDER SECTION 861 OF RESEARCH AND EXPERIMENTAL " " ^ "^ EXPENDITURES. (a) 2-YEAR SUSPENSION.—In the case of the taxpayer's first 2

taxable years beginning within 2 years after the date of the enactment of this Act, all research and esperimental expenditures (within the meaning of section 174 of the Internal Revenue Code of 1954) which are paid or incurred in such year for research activities conducted in the United States shall be allocated or apportioned to sources within the United States. (b) STUDY.—

(1) IN GENERAL.—The Secretary of the Treasury shall conduct a study with respect to the impact which section 1.861-8 of the Internal Revenue Service K^;ulations would have (A) on 26 CFR 1.861-8. research and experimental activities conducted in the United States and (B) on the availability of the foreign tax credit. (2) REPORT.—Not later than the date 6 months £uter the date of the enactment of this Act, the Secretary of the Treasury shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the study conducted under paragraph (1) (together with such recommendations as he may deem advisable).

Subtitle D—Small Business Provisions SEC. 231. REDUCTION IN CORPORATE TAX RATES.

(a) IN GENERAL.—Subsection (b) of section 11 (relating to amount of 26 USC 11. corporate tax) is amended— (1) by striking out "17 percent" in paragraph (1) and inserting in lieu thereof "15 percent (16 percent for taxable years beginning in 1982)'\ and (2) by striking out "20 percent" in paragraph (2) and inserting in lieu thereof "18 percent (19 percent for taxable years beginning in 1982)". (b) CONFORMING AMENDMENTS.—

(1) Paragraph (2) of section 821(a) (relating to imposition of tax 26 USC 821. on mutual insurance companies to which part 11 applies) is amended to read as follows: "(2) CAP ON TAX WHERE INCOME IS LESS THAN $12,000.—The tax imposed by paragraph (1) on so much of the mutual insurance company taxable income as does not exceed $12,000 shall not exceed 32 percent (30 percent for taxable years beginning after December 31, 1982) of the amount by which such income exceeds $6,000." (2) Subparagraph (B) of section 821(c)(l) (relating to imposition of alternative tax for certain small companies) is amended to read as follows: "(B) CAP WHERE INCOME IS LESS THAN $6,000.—The tax imposed by subparagraph (A) on so much of the taxable investment income as does not exceed $6,000 shall not exceed 32 percent (30 percent for taxable years beginning after December 31, 1982) of the amount by which such income exceeds $3,000." (3) The amendments made by paragraphs (1) and (2) shall apply 26 USC 821 to taxable years beginning after December 31, 1978; except that note. for purposes of applying sections 821(a)(2) and 821(c)(l)(B) of the Internal Revenue Code of 1954 (as amended by this subsection) to

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