,i #aacth ,,congress #b;d ,session ,h4 ,r4 #eddd ,,in ,,the ,,house ,,of ,,representatives ,september #aj1 #bjad ,mr4 ,pocan 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 limit the interest deduction for excessive interest of members of financial reporting groups4 #a4 ,short title ,this ,act may be cited as the ,corporate ,fair ,share ,tax ,act4 #b4 ,limitation on interest deduction for excessive interest of members of financial reporting groups 7a7 ,in general ,section #afc of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7n7 as subsection 7o7 and by inserting after subsection 7m7 the following3 7n7 ,limitation on excessive interest of members of financial reporting groups 7#a7 ,limitation 7,a7 ,in general ,if this subsection applies to any corporation for any taxable year1 no deduction shall be allowed under this chapter for the taxable year for interest expense to the extent that such expense exceeds the sum of-- 7i7 the amount of interest on indebtedness of the corporation includible in the corporation's gross income for the taxable year1 plus 7ii7 the corporation's proportionate share of the financial reporting group's net interest expense for the taxable year computed under ,united ,states income tax principles4 7,b7 ,proportionate share of net interest expense ,for purposes of subparagraph 7,a77ii7-- 7i7 ,in general ,a corporation's proportionate share of the financial reporting group's net interest expense means the amount equal to the percentage of the group's net interest expense which bears the same percentage as the corporation's earnings bears to the group's earnings4 7ii7 ,earnings ,for purposes of clause 7i71 earnings shall be the sum of net earnings plus net interest expense1 taxes1 depreciation1 and amortization4 7iii7 ,determinations relating to earnings ,for purposes of clause 7ii71 earnings1 net interest expense1 taxes1 depreciation1 and amortization with respect to a financial reporting group shall be as reflected on the financial reporting group's financial statements for the taxable year ending in the taxable year of the corporation4 7,c7 ,alternative determination ,in lieu of the limitation in subparagraph 7,a71 if-- 7i7 a corporation fails to substantiate the corporation's proportionate share of the financial reporting group's net interest expense for a taxable year1 or 7ii7 a corporation so elects1 no deduction shall be allowed under this chapter for the taxable year for interest expense to the extent that such expense exceeds #aj percent of the corporation's adjusted taxable income 7as defined under subsection 7j77#f77;,a774 7#b7 ,corporations to which subsection applies 7,a7 ,in general ,this subsection shall apply to any corporation for any taxable year if the corporation is a member of a financial reporting group4 7,b7 ,certain corporations not included ,this subsection shall not apply to any corporation which-- 7i7 is a corporation predominantly engaged in the active conduct of a banking1 financing1 or similar business1 or 7ii7 has less than #e1jjj1jjj of net interest expense for the taxable year4 7,c7 ,financial reporting group ,for purposes of subparagraph 7,a71 the term financial reporting group means a group that prepares consolidated financial statements in accordance with ,united ,states generally accepted accounting principles1 international financial reporting standards1 or other method authorized by the ,secretary of the ,treasury under regulations4 ,such term shall not include any corporation described in subparagraph 7,b77i74 7,d7 ,subgroups ,for purposes of this subsection1 all members of an expanded affiliated group 7as defined in section #ghgd7;c77#a77 shall be treated as #a corporation4 7#c7 ,net interest expense ,the term net interest expense has the meaning given such term by subsection 7j77#f77;,b74 7#d7 ,carryforward 7,a7 ,disallowed interest ,any amount disallowed under subparagraph 7,a7 or 7,c7 for any taxable year shall be treated as an interest expense in the next taxable year1 and such amount shall not be taken into account for purposes of applying subsection 7j77#b77;,a77ii7 for such taxable year4 7,b7 ,excess limitation ,the excess 7if any7 of the sum determined under paragraph 7#a77;,a7 7i7 and 7ii7 for a taxable year over the amount of interest expense deducted under this subsection for the taxable year shall be added to the limitation determined under paragraph 7#a7 for the next taxable year 7determined without regard to this subparagraph74 ,no excess limitation may be carried to more than #c taxable years4 7#e7 ,election ,the election under paragraph 7#a77;,c77ii7 shall be made at such time and in such manner as the ,secretary may prescribe by regulations4 7#f7 ,regulations ,the ,secretary shall prescribe such regulations and other guidance as may be necessary to carry out the purposes of this subsection1 including regulations to-- 7,a7 coordinate the application of this subsection with other interest deductibility rules1 7,b7 define financial services entities1 7,c7 permit financial reporting groups to compute the group's non-,united ,states net interest expense without making certain adjustments required under ,united ,states income tax principles1 7,d7 provide for the treatment of pass-through entities1 and 7,e7 allow the use of financial statements prepared under other countries' generally accepted accounting principles in appropriate circumstances where a financial reporting group does not prepare financial statements under ,united ,states generally accepted accounting principles or international financial reporting standards4 4 7b7 ,coordination with #afc7;j7 ,section #afc7;j77#b77;,a7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following flush sentence3 ,this subsection shall not apply to any corporation which is a member of a financial reporting group to which subsection 7n7 applies44 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjad4