Small Business Incentives Act

Small Business Incentives Act - Title I: Amends the Internal Revenue Code to require that unemployment compensation shall not be denied to any individual solely on the grounds that such individual's unemployment is the result of the closing of a business establishment or other entity in which such individual had an ownership interest.

Permits the owner-employee of a small business to deduct one-half of the social security taxes paid on self-employment income for taxable years beginning after December 31, 1985.

Provides that there is to be an annual inflation adjustment to the threshold amount which must be paid to agricultural workers before an employer becomes subject to the Federal Unemployment Tax Act. Sets the threshold amount at $30,000 for calendar year 1986.

Title II: Regulatory Reform - Authorizes appropriations necessary to carry out the provisions of the Paperwork Reduction Act. Repeals the authority of an agency to override the disapproval of a proposed information collection request.

Prohibits any agency from requiring any person to maintain, prepare, or produce any record after the expiration of three years after the date of the transaction or event which is the subject of the record. Provides exceptions from this rule for: (1) records relating to dangerous material; (2) health and medical records; and (3) records required under the Internal Revenue Code or regulations.

Subjects the Departments of the Treasury and Defense to the requirements of the Regulatory Flexibility Act.

Title III: Tax Provisions - Provides that the exclusion from income of group-term life insurance costs, employee death benefits, accident and health benefits, meals and lodging costs, and transportation furnished to the employee shall be available to self-employed individuals. Revises the utilization tests for certain fringe benefits (group-term life insurance, group legal services, educational assistance, and dependent care assistance) to provide that such rules will not apply in the case of an employer with less than 20 employees.

Allows a deduction for the expenses paid by self-employed individuals of unincorporated trades or businesses for health insurance.

Permits a taxpayer to elect to expense up to $10,000 of the costs of certain depreciable business property in the year the property is placed in service for taxable years beginning in 1986 and thereafter.

Allows a tax credit for small business employment expenditures equal to ten percent of the qualified increased employment expenditures of the small business employer for the taxable year. Restricts this tax credit to any taxpayer employing 20 or fewer employees. Sets out the procedures for calculating the amount of the credit and various definitions and special rules. Phases out this tax credit beginning in taxable years after December 31, 2006. Disallows a deduction for the portion of wages or salaries paid or incurred which is equal to the amount of the tax credit.

Permits a taxpayer to deduct up to $100,000 of the cost of the purchase of small business stock. Requires that the stock must be common stock in a small business with less than $2,000,000 in net worth and at least 80 percent of the gross receipts within the taxable year must be attributable to the active conduct of a trade or business. Provides that any individual and any person related to such individual shall be treated as a single taxpayer for purposes of this deduction. Requires the taxpayer to reduce the basis of any small business stock by the amount of any deduction taken for the purchase of such stock. Treats any gain on the disposition of small business stock as ordinary income to the extent such gain does not exceed the amount of the reduction in the basis of the stock which was required to be made.

Imposes an additional tax if the taxpayer disposes of small business stock before three years after the deduction for such stock was taken or if the issuing corporation fails to meet certain requirements within certain time periods. Sets forth certain definitions and special rules pertaining to this additional tax.