Small Business Tax Act of 1981

Small Business Tax Act of 1981 - Amends the Internal Revenue Code to permit a taxpayer to elect to expense (i.e., currently deduct) up $25,000 of the costs of new or used tangible personal property used in the taxpayer's trade or business during a taxable year in lieu of current provisions permitting additional first year depreciation.

Reduces corporate income tax rates. Reduces the amount of tax imposed on the taxable income of a small business corporation by an amount equal to the tax which would be imposed if such corporation's taxable income for the taxable year equalled the lesser of: (1) the amount of dividends distributed during the taxable year; or (2) $100,000. Excludes certain businesses from eligibility for such treatment.

Increases from $100,000 to $200,000 the allowable cost of used property eligible for the investment tax credit. Increases the investment tax credit percentage for rehabilitation expenditures in connection with certain buildings and certified historic structures. Qualifies certified historic structures which are used for residential purposes for the investment tax credit. Revises the definition of "qualified rehabilitated building" to increase from 20 years to 30 years the period which must have elapsed between the beginning of rehabilitation work and the date such building was placed in service. Includes as qualified rehabilitation expenditures any expenditures for property which is otherwise eligible for the investment tax credit.

Allows losses from the sale or exchange of preferred small business stock to be treated as ordinary losses. (Currently such treatment is available with regard only to common stock.)

Increases from 15 to 25 the number of shareholders in a subchapter S corporation.

Directs the Secretary of the Treasury to: (1) conduct a study of inventory accounting methods appropriate during periods of inflation and the simplification of such methods; and (2) report to the House Ways and Means Committee and the Senate Finance Committee on such study.