Sec. 13103. Clarification of inventory accounting rules for small businesses
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/bill/115/hr/1/eas/section-13103·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 471 is amended by redesignating subsection
(c)as subsection
(d)and by inserting after subsection
(b)the following new subsection: A qualified taxpayer shall not be required to use inventories under this section for a taxable year. A qualified taxpayer who is not required under this subsection to use inventories with respect to any property for a taxable year beginning after December 31, 2017, may treat such property— as a non-incidental material or supply, or in a manner which conforms to the taxpayer's method for accounting for such property in— an applicable financial statement (as defined in section 451(b)(3)), or in the case of a taxpayer that does not have an applicable financial statement, their books and records used for purposes of determining tax imposed by this title. For purposes of this subsection, the term qualified taxpayer means, with respect to any taxable year, a taxpayer who meets the gross receipts test of section 448(c) for the taxable year (or, in the case of a sole proprietorship, who would meet such test if such proprietorship were a corporation). Such term shall not include a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3). If a taxpayer changes its method of accounting because the taxpayer is not required to use inventories by reason of paragraph
(1)or is required to use inventories because such paragraph no longer applies to the taxpayer— such change shall be treated as initiated by the taxpayer, and such change shall be treated as made with the consent of the Secretary. . Subsection
(c)of section 263A is amended by adding at the end the following new paragraph: Nothing in this section shall require the use of inventories for any taxable year by a qualified taxpayer (within the meaning of section 471(c)(3)) who is not required to use inventories under section 471 for such taxable year. . The amendments made by this section shall apply to taxable years beginning after December 31, 2017.