,i #aacth ,,congress #ast ,session ,h4 ,r4 #bidj ,,in ,,the ,,house ,,of ,,representatives ,august #a1 #bjac ,mr4 ,kind 7for himself1 ,mr4 ,neal1 ,mr4 ,rangel1 ,mr4 ,pascrell1 ,mr4 ,larson of ,connecticut1 ,mr4 ,mc,dermott1 ,mr4 ,lewis1 ,ms4 ,schwartz1 ,mr4 ,danny ,k4 ,davis of ,illinois1 and ,mr4 ,levin7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to reduce the rate of tax on domestic manufacturing income to #bj percent4 #a4 ,short title2 findings 7a7 ,short title ,this ,act may be cited as the ,rebuilding ,american ,manufacturing ,act of #bjac4 7b7 ,findings ,congress finds the following3 7#a7 ,american manufacturing is vital to our economy1 and those who produce ,american goods and hire ,american workers should be a priority4 7#b7 ,manufacturing is an essential source of innovation that is critical to our continued prosperity in an increasingly competitive global economy4 7#c7 ,approximately #a4b million ,americans are employed by the manufacturing industry4 7#d7 ,the manufacturing industry provides stable jobs with sustainable wages to ,americans in every ,state4 7#e7 ,manufacturing jobs provide1 on average1 wages that are above the national average and provide a gateway to the middle class4 7#f7 ,the effective tax rate of domestic manufacturers ranges from #bg to #ca percent1 depending on location and the size of equipment used in production4 7#g7 ,tax reform must make the ,united ,states more competitive1 boost economic growth1 and foster the creation of sustainable ,american jobs4 7#h7 ,tax reform should particularly focus on those companies that grow1 build1 and create goods in the ,united ,states4 7#i7 ,the tax rate of domestic manufacturers should reflect the industry's contributions of employment1 growth1 innovation1 and competition in the ,united ,states4 #b4 #bj percent income tax rate for domestic manufacturing income 7a7 ,in general ,part ,,vi of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #bjj4 ,domestic manufacturing income 7a7 ,allowance of deduction ,there shall be allowed as a deduction an amount equal to #ej4e percent 7#dc percent in the case of a ,c corporation7 of the lesser of-- 7#a7 the domestic manufacturing income of the taxpayer for the taxable year1 or 7#b7 taxable income 7determined without regard to this section and section #aii7 for the taxable year4 7b7 ,limitation based on domestic investment ,for purposes of this section-- 7#a7 ,in general ,the amount of the deduction allowable under subsection 7a7 for any taxable year shall not exceed #be percent of the taxpayer's qualifying domestic investment for the taxable year4 7#b7 ,qualifying domestic investment amount ,the term qualifying domestic investment means1 with respect to any taxpayer for any taxable year1 the sum of-- 7,a7 the ,w-#b wages of such taxpayer for such taxable year1 7,b7 the sum of the deductions allowable under sections #afg1 #afi1 #agi1 and #agi;,d to such taxpayer for such taxable year1 plus 7,c7 the deduction allowable under section #agd to such taxpayer for such taxable year4 7#c7 ,w-#b wages ,the term ,w-#b wages means1 with respect to any person for any taxable year1 the sum of the amounts described in paragraphs 7#c7 and 7#h7 of section #fjea7;a7 paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year4 ,such term shall not include any amount which is not properly included in a return filed with the ,social ,security ,administration on or before the #fjth day after the due date 7including extensions7 for such return4 7#d7 ,limitation to amounts attributable to domestic production ,the term qualifying domestic investment shall not include any amount which is not properly allocable to domestic manufacturing gross receipts for purposes of subsection 7c7 7and shall include any amount which is so allocable under subsection 7c77#d774 7#e7 ,acquisitions and dispositions ,the ,secretary shall provide for the application of this subsection in cases where the taxpayer acquires1 or disposes of1 the major portion of a trade or business or the major portion of a separate unit of a trade or business during the taxable year4 7c7 ,domestic manufacturing income ,for purposes of this section-- 7#a7 ,in general ,the term domestic manufacturing income for any taxable year means an amount equal to the excess 7if any7 of-- 7,a7 the taxpayer's domestic manufacturing gross receipts for such taxable year1 over 7,b7 the sum of-- 7i7 the cost of goods sold that are allocable to such receipts1 and 7ii7 other expenses1 losses1 or deductions 7other than the deduction allowed under this section71 which are properly allocable to such receipts4 7#b7 ,allocation method ,the ,secretary shall prescribe rules for the proper allocation of items described in paragraph 7#a7 for purposes of determining domestic manufacturing income4 ,such rules shall provide for the proper allocation of items whether or not such items are directly allocable to domestic manufacturing gross receipts4 7#c7 ,special rules for determining costs 7,a7 ,in general ,for purposes of determining costs under clause 7i7 of paragraph 7#a77;,b71 any item or service brought into the ,united ,states shall be treated as acquired by purchase1 and its cost shall be treated as not less than its value immediately after it entered the ,united ,states4 ,a similar rule shall apply in determining the adjusted basis of leased or rented property where the lease or rental gives rise to domestic manufacturing gross receipts4 7,b7 ,exports for further manufacture ,in the case of any property described in subparagraph 7,a7 that had been exported by the taxpayer for further manufacture1 the increase in cost or adjusted basis under subparagraph 7,a7 shall not exceed the difference between the value of the property when exported and the value of the property when brought back into the ,united ,states after the further manufacture4 7#d7 ,treatment of certain accelerated depreciation deductions ,in the case of property placed in service after ,december #ca1 #bjjg1 and before the first taxable year of the taxpayer beginning after ,december #ca1 #bjab1 the deduction under section #afh with respect to such property which is treated as properly allocable to domestic manufacturing gross receipts of the taxpayer for any taxable year shall be determined without regard to section #afh7k77#a74 7#e7 ,treatment of deferred compensation under nonqualified plans ,in the case of compensation paid or incurred by the taxpayer which is deferred under a nonqualified deferred compensation plan 7as defined in section #dji;,a7d77#a771 the amount under paragraph 7#a77;,b77ii7 shall be determined as though the deduction for such compensation is allowed for the taxable year in which the services for which such compensation was paid or incurred are performed4 ,this paragraph shall not apply with respect to compensation paid or incurred for services performed in taxable years beginning before the first taxable year of the taxpayer beginning after ,december #ca1 #bjab4 7d7 ,domestic manufacturing gross receipts ,for purposes of this section-- 7#a7 ,in general ,the term domestic manufacturing gross receipts means the gross receipts of the taxpayer which are derived from any lease1 rental1 license1 sale1 exchange1 or other disposition of qualified property which was manufactured1 produced1 or grown by the taxpayer in whole or in significant part within the ,united ,states4 ,such term shall not include gross receipts of the taxpayer which are derived from the sale of food and beverages prepared by the taxpayer at a retail establishment4 7#b7 ,special rule for certain government contracts ,gross receipts derived from the manufacture or production of any property shall not fail to be treated as meeting the requirements of paragraph 7#a7 solely because title or risk of loss with respect to such property is held by the ,federal ,government if-- 7,a7 such property is manufactured or produced by the taxpayer pursuant to a contract with the ,federal ,government1 and 7,b7 the ,federal ,acquisition ,regulation requires that title or risk of loss with respect to such property be transferred to the ,federal ,government before the manufacture or production of such property is complete4 7#c7 ,qualified property ,the term qualified property means-- 7,a7 any tangible personal property other than-- 7i7 oil1 gas1 and primary products thereof 7within the meaning of section #aii7;d77#i77;,c771 7ii7 property with respect to which section #fac applies1 7iii7 property described in paragraph 7#c7 or 7#d7 of section #afh7;f71 and 7iv7 electricity and potable water1 and 7,b7 any computer software other than video games rated ,m1 ,,ao1 ,,rp1 or any similar rating as determined by the ,secretary1 by the ,entertainment ,software ,rating ,board4 7#d7 ,partnerships owned by expanded affiliated groups ,for purposes of this subsection1 if all of the interests in the capital and profits of a partnership are owned by members of a single expanded affiliated group at all times during the taxable year of such partnership1 the partnership and all members of such group shall be treated as a single taxpayer during such period4 7#e7 ,related persons 7,a7 ,in general ,the term domestic manufacturing gross receipts shall not include any gross receipts of the taxpayer derived from property leased1 licensed1 or rented by the taxpayer for use by any related person4 7,b7 ,related person ,for purposes of subparagraph 7,a71 a person shall be treated as related to another person if such persons are treated as a single employer under subsection 7a7 or 7b7 of section #eb or subsection 7m7 or 7o7 of section #dad1 except that determinations under subsections 7a7 and 7b7 of section #eb shall be made without regard to section #aefc7;b74 7e7 ,special rules 7#a7 ,elective application of deduction ,except as otherwise provided by the ,secretary1 the taxpayer may elect not to take any item of income into account as domestic manufacturing gross receipts for purposes of this section4 7#b7 ,coordination with section #aii ,if a deduction is allowed under this section with respect to any taxpayer for any taxable year1 any gross receipts of the taxpayer which are taken into account under this section for such taxable year 7and any items properly allocable thereto under subsections 7b7 or 7c77 shall not be taken into account under section #aii for such taxable year4 7#c7 ,application of section to pass-thru entities 7,a7 ,partnerships and ,s corporations ,in the case of a partnership or ,s corporation-- 7i7 this section shall be applied at the partner or shareholder level1 7ii7 each partner or shareholder shall take into account such person's allocable share of each item described in subparagraph 7,a7 or 7,b7 of subsection 7c77#a7 7determined without regard to whether the items described in such subparagraph 7,a7 exceed the items described in such subparagraph 7,b771 and 7iii7 each partner or shareholder shall be treated for purposes of subsection 7b7 as having an amount of each item taken into account in determining qualifying domestic investment of the partnership or ,s corporation for the taxable year equal to such person's allocable share of such item 7as determined under regulations prescribed by the ,secretary74 7,b7 ,trust and estates ,in the case of a trust or estate-- 7i7 the items referred to in subparagraph 7,a77ii7 7as determined therein7 and the qualifying domestic investment of the trust or estate for the taxable year1 shall be apportioned between the beneficiaries and the fiduciary 7and among the beneficiaries7 under regulations prescribed by the ,secretary1 and 7ii7 for purposes of paragraph 7#d71 adjusted gross income of the trust or estate shall be determined as provided in section #fg7;e7 with the adjustments described in such paragraph4 7,c7 ,regulations ,the ,secretary may prescribe rules requiring or restricting the allocation of items and qualifying domestic investment under this paragraph and may prescribe such reporting requirements as the ,secretary determines appropriate4 7#d7 ,application to individuals ,in the case of an individual1 subsection 7a77#b7 shall be applied by substituting adjusted gross income for taxable income4 ,for purposes of the preceding sentence1 adjusted gross income shall be determined-- 7,a7 after application of sections #hf1 #ace1 #acg1 #bai1 #bba1 #bbb1 and #dfi1 and 7,b7 without regard to this section and section #aii4 7#e7 ,application of other rules ,rules similar to the rules of paragraphs 7#c71 7#d71 7#e71 7#f71 7#g71 and 7#aj7 of section #aii7;d7 shall apply for purposes of this section4 4 7b7 ,conforming amendments 7#a7 ,section #ef7;d77#a77;,a7 of such ,code is amended by striking deduction under section #aii both places it appears and inserting deductions under sections #aii and #bjj4 7#b7 ,section #ef7;g77#d77;,c7 of such ,code is amended by adding at the end the following new clause3 7vii7 ,deduction for domestic business income ,clause 7i7 shall not apply to any amount allowable as a deduction under section #bjj4 4 7#c7 ,the following provisions of such ,code are each amended by inserting #bjj1 after #aii14 7,a7 ,section #hf7;b77#b77;,a74 7,b7 ,section #ace7;c77#d77;,a74 7,c7 ,section #acg7;b77#c77;,a74 7,d7 ,section #bai7;g77#c77;,a77ii74 7,e7 ,section #bba7;b77#b77;,c77i74 7,f7 ,section #bbb 7b77#b77;,c77i74 7,g7 ,section #bdf7;b77#a74 7,h7 ,section #dfi7;i77#c77;,f77iii74 7#d7 ,section #afc7;j77#f77;,a77i7 of such ,code is amended by striking and at the end of subclause 7,,iii7 and by inserting after subclause 7,,iv7 the following new subclause3 7,v7 any deduction allowable under section #bjj1 and 4 7#e7 ,section #agj7;b77#b77;,c7 of such ,code is amended by striking and at the end of clause 7iv71 by striking the period at the end of clause 7v7 and inserting 1 and1 and by inserting after clause 7v7 the following new clause3 7vi7 section #bjj4 4 7#f7 ,section #agb7;d7 of such ,code is amended by adding at the end the following new paragraph3 7#h7 ,domestic business income ,the deduction under section #bjj shall not be allowed4 4 7#g7 ,section #aii7;d77#b77;,a7 of such ,code is amended by inserting #bjj1 after #acg14 7#h7 ,section #fac7;a7 of such ,code is amended by striking deduction under section #aii and inserting deductions under sections #aii and #bjj4 7#i7 ,section #fac;,a7d77#a7 of such ,code is amended by redesignating subparagraphs 7,c71 7,d71 and 7,e7 as subparagraphs 7,d71 7,e71 and 7,f71 respectively1 and by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 any deduction allowable under section #bjj1 4 7#aj7 ,section #adjb7;a7 of such ,code is amended by striking and at the end of paragraph 7#af71 by redesignating paragraph 7#ag7 as paragraph 7#ah71 and by inserting after paragraph 7#af7 the following new paragraph3 7#ag7 the deduction provided by section #bjj shall not be allowed2 and 4 7#aa7 ,the table of sections for part ,,vi of subchapter ,b of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #bjj4 ,domestic manufacturing income4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjab4