Urban and Rural Revitalization Act of 1981

Urban and Rural Revitalization Act of 1981 - Amends the Internal Revenue Code to provide for the designation of revitalization areas, subject to the approval of the Secretary of Commerce, by local governments which agree to take actions designed to stimulate the development of business and jobs in the area.

Increases from 15 to 100 the permissible number of shareholders in a subchapter S corporation which is a qualified business within the meaning of this Act. Defines "qualified business" as a trade or business which is actively conducted in a revitalization area and whose work force is at least half comprised of residents of such an area.

Allows accelerated depreciation for qualified businesses under the straight line method by using: (1) for aggregate bases of $500,000 or less, a three year useful life; and (2) for aggregate bases exceeding $500,000, a ten year useful life (in the case of buildings or structural components) or a three year useful life for other property. Allows the full investment tax credit for such property despite election of accelerated depreciation.

Reduces the alternative tax on corporate capital gains and increases the capital gains deduction. Permits property to remain qualified for purposes of the revised capital gains treatment after a designation of a revitalization area has terminated.

Permits any qualified business to elect to use the cash receipts and disbursements method of accounting without regard to any inventory requirements.

Allows an income tax credit for 12 percent of the wages paid during the taxable year to individuals who are employed in, and residents of, a revitalization area. Limits the wages considered for purposes of such credit to $15,000 for any individual.