INCREASED EXPENSING FOR SMALL BUSINESS.

SEC. 202. INCREASED EXPENSING FOR SMALL BUSINESS.(a) In General.—Paragraph (1) of section 179(b) (relating to dollar limitation) is amended to read as follows:“(1) Dollar limitation.—The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $25,000 ($100,000 in the case of taxable years beginning after 2002 and before 2006).”.(b) Increase in Qualifying Investment at Which Phaseout Begins.—Paragraph (2) of section 179(b) (relating to reduction in limitation) is amended by inserting “($400,000 in the case of taxable years beginning after 2002 and before 2006)” after “$200,000”.(c) Off-the-Shelf Computer Software.—Paragraph (1) of section 179(d) (defining section 179 property) is amended to read as follows:“(1) Section 179 property.—For purposes of this section, the term ‘section 179 property’ means property—“(A) which is—“(i) tangible property (to which section 168 applies), or“(ii) computer software (as defined in section 197(e)(3)(B)) which is described in section 197(e)(3)(A)(i), to which section 167 applies, and which is placed in service in a taxable year beginning after 2002 and before 2006,“(B) which is section 1245 property (as defined in section 1245(a)(3)), and“(C) which is acquired by purchase for use in the active conduct of a trade or business.Such term shall not include any property described in section 50(b) and shall not include air conditioning or heating units.”.(d) Adjustment of Dollar Limit and Phaseout Threshold for Inflation.—Subsection (b) of section 179 (relating to limitations) is amended by adding at the end the following new paragraph:“(5) Inflation adjustments.—117 STAT. 758“(A) In general.—In the case of any taxable year beginning in a calendar year after 2003 and before 2006, the $100,000 and $400,000 amounts in paragraphs (1) and (2) shall each be increased by an amount equal to—“(i) such dollar amount, multiplied by“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 2002’ for ‘calendar year 1992’ in subparagraph (B) thereof.“(B) Rounding.—“(i) Dollar limitation.—If the amount in paragraph (1) as increased under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.“(ii) Phaseout amount.—If the amount in paragraph (2) as increased under subparagraph (A) is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.”.(e) Revocation of Election.—Paragraph (2) of section 179(c) (relating to election irrevocable) is amended by adding at the end the following new sentence: “Any such election or specification with respect to any taxable year beginning after 2002 and before 2006 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable.”.(f) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2002.