Page:United States Statutes at Large Volume 98 Part 1.djvu/933

 PUBLIC LAW 98-369—JULY 18, 1984 the employee will be able to exclude such benefit from income under section 117 or 132." (4) WITHHOLDING.—Subsection (a) of section 3401 (defining wages) is amended— (A) by striking out "all remuneration paid in any medium" in the material preceding paragraph (1) and inserting in lieu thereof "all remuneration (including benefits) paid in any medium", and (B) by striking out "or" at the end of paragraph (18), by striking out the period at the end of paragraph (19) and inserting in lieu thereof "; or", and by adding at the end thereof the following new paragraph: "(20) any benefit provided to or on behalf of an employee if at the time such benefit is provided it is reasonable to believe that the employee will be able to exclude such benefit from income under section 117 or 132."

98 STAT. 885 Ante, p. 877. 26 USC 3401.

(5) METHOD OF COLLECTING TAX FROM NON-CASH FRINGE BENE-

FITS.—Section 3501 (relating to collection and payment of taxes) is amended— (A) by striking out "The taxes" and inserting in lieu thereof the following:

26 USC 3501.

"(a) GENERAL RULE.—The taxes", and

(B) by adding at the end thereof the following new subsection: "(b) TAXES WITH RESPECT TO NON-CASH FRINGE BENEFITS.—The

taxes imposed by this subtitle with respect to non-cash fringe benefits shall be collected (or paid) by the employer at the time and in the manner prescribed by the Secretary by regulations." (e) ELECTION WITH RESPECT TO CERTAIN EXISTING LINES OF BUSINESS.—

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(1) IN GENERAL.—Chapter 43 (relating to qualified pension, etc., plans), as amended by this Act, is amended by adding at the end thereof the following new section: "SEC. 4977. TAX ON CERTAIN FRINGE BENEFITS PROVIDED BY AN EMPLOYER.

26 USC 4977.

"(a) IMPOSITION OF TAX.—In the case of an employer to whom an election under this section applies for any calendar year, there is hereby imposed a tax for such calendar year equal to 30 percent of the excess fringe benefits. "(b) EXCESS FRINGE BENEFITS.—For purposes of subsection (a), the term 'excess fringe benefits' means, with respect to any calendar year— "(1) the aggregate value of the fringe benefits provided by the employer during the calendar year which were not includible in gross income under paragraphs (1) and (2) of section 132(a), over Ante, p. 877. "(2) 1 percent of the aggregate amount of compensation— "(A) which was paid by the employer during such calendar year to employees, and "(B) was includible in gross income for purposes of chapter 1. "(c) EFFECT OF ELECTION ON SECTION 132(a).—If— "(1) an election under this section is in effect with respect to an employer for any calendar year, and "(2) as of January 1, 1984, substantially all of the employees of the employer were entitled to employee discounts or services provided by the employer in 1 line of business.

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