S. 3544 - Prohibiting Incentives for Corporations that Kickout Employees Tax (PICKET) Act

115TH CONGRESS
2D SESSION

S. 3544

To amend the Internal Revenue Code of 1986 to modify the rate
of tax on corporations participating in labor lockouts and
to prohibit deductions and credits for wages and benefits
paid to temporary workers during labor lockouts.

IN THE SENATE OF THE UNITED STATES

OCTOBER 3 (legislative day, SEPTEMBER 28), 2018

Mr. TESTER introduced the following bill; which was
read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to modify the rate of tax on corporations participating in labor lockouts and to prohibit deductions and credits for wages and benefits paid to temporary workers during labor lockouts.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Prohibiting Incentives for Corporations that Kickout Employees Tax (PICKET) Act".

SEC. 2. RATE OF TAX FOR CORPORATIONS PARTICIPATING IN LABOR LOCKOUTS.

(a) IN GENERAL. — Section 11 of the Internal Revenue Code of 1986 is amended by redesignating subsections (c) and (d) as subsections (d) and (e), respectively, and by inserting after subsection (b) the following new subsection:

"(c) EXCEPTION FOR DISQUALIFIED CORPORATIONS. —

"(1) IN GENERAL. — In the case of any corporation participating in a labor lockout during the taxable year, subsection (b) shall be applied by substituting '35 percent' for '21 percent'.

"(2) LABOR LOCKOUT. — For purposes of this subsection, the term 'labor lockout' means a labor dispute involving a work stoppage, wherein an employer withholds work from its employees in order to gain a concession from them.".

(b) CONFORMING AMENDMENTS. —

(1) The heading of section 11(d) of the Internal Revenue Code of 1986 (as redesignated by subsection (a)) is amended by striking "EXCEPTIONS" and inserting "OTHER EXCEPTIONS".

(2) Section 280C(c)(2)(B)(ii)(II) of such Code is amended by inserting "(section 11(c), in the case of a disqualified domestic subsidiary (as defined in such section))" after "section 11(b)".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 3. DENIAL OF DEDUCTION AND CREDITS FOR WAGES AND BENEFITS PAID TO TEMPORARY WORKERS DURING A LABOR LOCKOUT.

(a) DEDUCTION. —

(1) IN GENERAL. — Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

"SEC. 280I. REMUNERATION PAID DURING LABOR LOCKOUTS.

"(a) IN GENERAL. — No deduction shall be allowed for any remuneration paid by the taxpayer (including wages or other benefits) to any temporary replacement worker during a labor lockout (as defined in section 11(c)(2)).

"(b) TEMPORARY REPLACEMENT WORKER. — For purposes of subsection (a), the term 'temporary replacement worker' means any individual compensated to perform duties normally performed by employees from whom work is withheld under the labor lockout.".

(2) CLERICAL AMENDMENT. — The table of sections for part IX of subchapter B of chapter 1 of such Code is amended by adding at the end the following new item:

"Sec. 280I. Remuneration paid during labor lockouts.".

(b) CREDITS. —

(1) RESEARCH CREDIT. — Section 41(b)(2)(D) of the Internal Revenue Code of 1986 is amended by adding at the end the following new clause:

"(iv) EXCLUSION FOR WAGES PAID DURING A LABOR LOCKOUT. — The term 'wages' shall not include any amount paid to a temporary replacement worker (as defined in section 280I) during a labor lockout (as defined in section 11(c)(2)).".

(2) WORK OPPORTUNITY CREDIT. — Section 51(c) of such Code is amended by adding at the end the following new paragraph:

"(6) EXCLUSION FOR WAGES PAID DURING A LABOR LOCKOUT. — The term 'wages' shall not include any amount paid to a temporary replacement worker (as defined in section 280I) during a labor lockout (as defined in section 11(c)(2)).".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.