text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``The Personal Exemption Fairness Act 
  of 2010''.
  
  SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN PERSONAL EXEMPTIONS.
  
      (a) In General.--Subsection (d) of section 151 of the Internal 
  Revenue Code of 1986 is amended by adding at the end the following new 
  paragraph:
              ``(5) Area cost-of-living adjustment.--
                      ``(A) In general.--Each of the dollar amounts 
                  otherwise in effect under paragraphs (1) and (3)(C) for 
                  any taxable year beginning after 2010 shall be 
                  multiplied by the applicable multiplier for the taxable 
                  year which applies to the statistical area in which the 
                  taxpayer's primary place of abode during the taxable 
                  year is located.
                      ``(B) Applicable multipliers.--For purposes of this 
                  paragraph--
                              ``(i) In general.--Not later than December 
                          15 of each calendar year, the Secretary shall 
                          prescribe an applicable multiplier for each 
                          statistical area of the United States which 
                          shall apply to taxable years beginning during 
                          the succeeding calendar year.
                              ``(ii) Determination of multipliers.--
                                      ``(I) In the case of a statistical 
                                  area where the cost-of-living 
                                  differential for the calendar year does 
                                  not exceed 125 percent, the applicable 
                                  multiplier is 1.
                                      ``(II) In the case of a statistical 
                                  area not described in subclause (I), 
                                  the applicable multiplier is the cost-
                                  of-living differential for the calendar 
                                  year.
                              ``(iii) Cost of living differential.--The 
                          cost-of-living differential for any statistical 
                          area for any calendar year is the percentage 
                          determined by dividing--
                                      ``(I) the cost-of-living for such 
                                  area for the preceding calendar year, 
                                  by
                                      ``(II) the average cost-of-living 
                                  for the United States for the preceding 
                                  calendar year.
                              ``(iv) Cost-of-living for area.--
                                      ``(I) In general.--For each 
                                  calendar year beginning after 2009, the 
                                  Secretary of Labor shall determine and 
                                  publish a cost-of-living index for each 
                                  statistical area.
                                      ``(II) Methodology.--The cost-of-
                                  living index determined under subclause 
                                  (I) for any statistical area for any 
                                  calendar year shall be based on average 
                                  market prices for the area for the 12-
                                  month period ending on August 31 of 
                                  such calendar year. The market prices 
                                  taken into account under the preceding 
                                  sentence shall be selected and used 
                                  under the same methodology as is used 
                                  by the Secretary of Labor in developing 
                                  the Consumer Price Index for All Urban 
                                  Consumers.
                              ``(v) Statistical area.--For purposes of 
                          this subsection the term `statistical area' 
                          means--
                                      ``(I) any metropolitan statistical 
                                  area as defined by the Secretary of 
                                  Commerce, and
                                      ``(II) the portion of any State not 
                                  within a metropolitan statistical area 
                                  as so defined.''.
      (b) Effective Date.--
              (1) In general.--The amendments made by this section shall 
          apply to taxable years beginning after December 31, 2010.
              (2) Transition rule.--Notwithstanding section 151(d)(5)(B) 
          of the Internal Revenue Code (as added by this section), the 
          date for prescribing applicable multipliers for taxable years 
          beginning in calendar year 2011 shall be the date 1 year after 
          the date of the enactment of this Act.
target: Personal Exemption Fairness Act of 2010 - Amends the Internal Revenue Code to require annual metropolitan statistical area cost-of-living adjustments, beginning after 2010, to the personal tax exemption amount. Directs the Secretary of Labor to determine and publish a cost-of-living index for each metropolitan statistical area.
feat_title: To amend the Internal Revenue Code of 1986 to adjust personal exemptions for high cost-of-living areas.