S.561 - Offshoring Prevention Act
A bill to amend the Internal Revenue Code of 1986 to provide for the taxation of income controlled foreign corporations attributable to imported property.
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Mr. WHITEHOUSE (for himself, Mr. DURBIN, Mr. LEAHY, Mr. HARKIN, Mr. LEVIN, and Mrs. BOXER) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink
SECTION 1. SHORT TITLE.
SEC. 2. TAXATION OF INCOME OF CONTROLLED FOREIGN CORPORATIONS ATTRIBUTABLE TO IMPORTED PROPERTY.
(a) General Rule- Subsection (a) of section 954 of the Internal Revenue Code of 1986 is amended by striking the period at the end of paragraph (5) and inserting ‘, and’, by redesignating paragraph (5) as paragraph (4), and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
‘(1) IN GENERAL- For purposes of subsection (a)(5), the term ‘imported property income’ means income (whether in the form of profits, commissions, fees, or otherwise) derived in connection with--CommentsClose CommentsPermalink
Such term shall not include any foreign oil and gas extraction income (within the meaning of section 907(c)) or any foreign oil related income (within the meaning of section 907(c)).CommentsClose CommentsPermalink
‘(A) IN GENERAL- Except as otherwise provided in this paragraph, the term ‘imported property’ means property which is imported into the United States by the controlled foreign corporation or a related person.CommentsClose CommentsPermalink
‘(B) IMPORTED PROPERTY INCLUDES CERTAIN PROPERTY IMPORTED BY UNRELATED PERSONS- The term ‘imported property’ includes any property imported into the United States by an unrelated person if, when such property was sold to the unrelated person by the controlled foreign corporation (or a related person), it was reasonable to expect that--CommentsClose CommentsPermalink
‘(i) before substantial use in the United States, is sold, leased, or rented by the controlled foreign corporation or a related person for direct use, consumption, or disposition outside the United States; orCommentsClose CommentsPermalink
‘(D) EXCEPTION FOR CERTAIN AGRICULTURAL COMMODITIES- The term ‘imported property’ does not include any agricultural commodity which is not grown in the United States in commercially marketable quantities.CommentsClose CommentsPermalink
‘(A) IMPORT- For purposes of this subsection, the term ‘import’ means entering, or withdrawal from warehouse, for consumption or use. Such term includes any grant of the right to use intangible property (as defined in section 936(h)(3)(B)) in the United States.CommentsClose CommentsPermalink
‘(B) UNITED STATES- For purposes of this subsection, the term ‘United States’ includes the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.CommentsClose CommentsPermalink
‘(C) UNRELATED PERSON- For purposes of this subsection, the term ‘unrelated person’ means any person who is not a related person with respect to the controlled foreign corporation.CommentsClose CommentsPermalink
‘(D) COORDINATION WITH FOREIGN BASE COMPANY SALES INCOME- For purposes of this section, the term ‘foreign base company sales income’ shall not include any imported property income.’.CommentsClose CommentsPermalink
(1) IN GENERAL- Paragraph (1) of section 904(d) of the Internal Revenue Code of 1986 is amended by striking ‘and’ at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph:CommentsClose CommentsPermalink
(2) IMPORTED PROPERTY INCOME DEFINED- Paragraph (2) of section 904(d) of such Code is amended by redesignating subparagraphs (I), (J), and (K) as subparagraphs (J), (K), and (L), respectively, and by inserting after subparagraph (H) the following new subparagraph:CommentsClose CommentsPermalink
(3) Paragraph (5) of section 954(b) of such Code is amended by striking ‘and the foreign base company oil related income’ and inserting ‘the foreign base company oil related income, and the imported property income’.CommentsClose CommentsPermalink
(e) Effective Date- The amendments made by this section shall apply to taxable years of foreign corporations beginning after the date of the enactment of this Act, and to taxable years of United States shareholders within which or with which such taxable years of such foreign corporations end.CommentsClose CommentsPermalink