,i  #aaf? ,,congress  #b;d ,session  ,h4
 ,r4 #fiib  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,may #bb1 #bjbj,mr4   
,pascrell 7= himself1 ,mr4 ,danny ,k4   
,davis ( ,ill9ois1 ,ms4 ,sn*ez1 ,ms4    
,del,bene1 ,mr4 ,swalwell ( ,cali=nia1  
,ms4 ,norton1 ,ms4 ,br[nley ( ,cali=nia1
 ,mrs4 ,watson ,coleman1 ,ms4 ,b>ragn1  
,ms4 ,lee ( ,cali=nia1 & ,mr4 ,coh57    
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,ways & ,means  ,a     
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to enc\rage dome/ic       
ins\rc+ & disc\rage =eign outs\rc+4  #a4
 ,%ort title ,?is ,act may be cit$ z !  
,br+ ,jobs ,home ,act4  #b4 ,cr$it =    
ins\rc+ exp5ses  7a7 ,9 g5]al ,subp>t ,d
 ( "p ,,iv ( sub*apt] ,a ( *apt] #a ( ! 
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new section3  
#de,u4 ,cr$it = ins\rc+ exp5ses  7a7 ,9 
g5]al ,= purposes ( section #ch1 !      
ins\rc+ exp5ses cr$it = any taxable ye> 
is an am\nt equal to #bj p]c5t ( !      
eligible ins\rc+ exp5ses ( ! taxpay] :i*

 are tak5 into acc\nt 9 su* taxable ye> 
"u subsection 7d74  7b7 ,eligible       
ins\rc+ exp5ses ,= purposes ( ?is       
section-- 7#a7 ,9 g5]al ,! t]m eligible 
ins\rc+ exp5ses means-- 7,a7 eligible   
exp5ses paid or incurr$ by ! taxpay] 9  
connection ) ! elim9ation ( any bus9ess 
unit ( ! taxpay] 7or ( any memb] ( any  
exp&$ affiliat$ gr\p 9 :i* ! taxpay] is 
also a memb]7 locat$ outside ! ,unit$   
,/ates1 &  7,b7 eligible exp5ses paid or
 incurr$ by ! taxpay] 9 connection ) !  
e/abli%m5t ( any bus9ess unit ( !       
taxpay] 7or ( any memb] ( any exp&$     
affiliat$ gr\p 9 :i* ! taxpay] is also a
 memb]7 locat$ )9 ! ,unit$ ,/ates1  if  
su* e/abli%m5t con/itutes ! relocation (
 bus9ess unit s elim9at$4 ,= purposes ( 
! prec$+ s5t5ce1 a relocation %all n be 
treat$ z fail+ to occur m]ely because   
su* elim9ation occurs 9 a diff]5t       
taxable ye> ?an su* e/abli%m5t4  7#b7   
,eligible exp5ses ,! t]m eligible       
exp5ses means-- 7,a7 any am\nt = :i* a  
d$uction is all[$ to ! taxpay] "u       

section #afb1 &  7,b7 p]mit & lic5se    
fees1 lease brok]age fees1 equipm5t     
in/allation co/s1 &1 to ! ext5t provid$ 
by ! ,secret>y1 o!r simil> exp5ses4     
,su* t]m does n include any comp5sation 
:i* is paid or incurr$ 9 connection )   
sev]ance f employm5t &1 to ! ext5t      
provid$ by ! ,secret>y1 any simil>      
am\nt4  7#c7 ,bus9ess unit ,! t]m       
bus9ess unit means-- 7,a7 any trade or  
bus9ess1 &  7,b7 any l9e ( bus9ess1 or  
functional unit1 :i* is "p ( any trade  
or bus9ess4  7#d7 ,exp&$ affiliat$ gr\p 
,! t]m exp&$ affiliat$ gr\p means an    
affiliat$ gr\p z def9$ 9 section        
#aejd7;a71 det]m9$ )\t reg>d to section 
#aejd7;b77#c7 & by sub/itut+ m ?an #ej  
p]c5t = at lea/ #hj p]c5t ea* place x   
appe>s 9 section #aejd7;a74 ,a p>tn]%ip 
or any o!r entity 7o!r ?an a            
corporation7 %all be treat$ z a memb] ( 
an exp&$ affiliat$ gr\p if su* entity is
 controll$ 7)9 ! mean+ ( section        
#ied7;d77#c77 by memb]s ( su* gr\p      
7includ+ any entity treat$ z a memb] (  

su* gr\p by reason ( ?is p>agraph74     
7#e7 ,exp5ses mu/ be pursuant to ins\rc+
 plan ,am\nts %all be tak5 into acc\nt  
"u p>agraph 7#a7 only to ! ext5t t su*  
am\nts are paid or incurr$ pursuant to a
 writt5 plan approv$ ! bo>d ( directors 
or au?oriz$ (fic]s to c>ry out !        
relocation describ$ 9 p>agraph 7#a74    
7#f7 ,op]at+ exp5ses n tak5 into acc\nt 
,any am\nt paid or incurr$ 9 connection 
) ! ongo+ op]ation ( a bus9ess unit %all
 n be treat$ z an am\nt paid or incurr$ 
9 connection ) ! e/abli%m5t or          
elim9ation ( su* bus9ess unit4  7c7     
,increas$ dome/ic employm5t requirem5t  
,no cr$it %all be all[$ "u ?is section  
unless ! numb] ( full-"t equival5t      
employees ( ! taxpay] = ! taxable ye> = 
:i* ! cr$it is claim$ exce$s ! numb] (  
full-"t equival5t employees ( ! taxpay] 
= ! la/ taxable ye> end+ be=e ! fir/    
taxable ye> 9 :i* su* eligible ins\rc+  
exp5ses 7 paid or incurr$4 ,= purposes (
 ?is subsection1 full-"t equival5t      
employees has ! mean+ giv5 su* t]m "u   

section #de,r7d7 7& ! applicable rules (
 section #de,r7e771 det]m9$ by only tak+
 into acc\nt wages 7z o!rwise def9$ 9   
section #de,r7e77 paid ) respect to     
s]vices p]=m$ )9 ! ,unit$ ,/ates4 ,all  
employ]s treat$ z a s+le employ] "u     
subsection 7b71 7c71 7m71 or 7o7 (      
section #dad %all be treat$ z a s+le    
employ] = purposes ( ?is subsection4    
7d7 ,cr$it all[$ ^u completion ( ins\rc+
 plan  7#a7 ,9 g5]al ,except z provid$ 9
 p>agraph 7#b71 eligible ins\rc+ exp5ses
 %all be tak5 into acc\nt "u subsection 
7a7 9 ! taxable ye> dur+ :i* ! plan     
describ$ 9 subsection 7b77#e7 has be5   
complet$ & all eligible ins\rc+ exp5ses 
pursuant to su* plan h be5 paid or      
incurr$4  7#b7 ,election to apply       
employm5t te/ & claim cr$it 9 fir/ full 
taxable ye> aft] completion ( plan ,if !
 taxpay] elects ! application ( ?is     
p>agraph1 eligible ins\rc+ exp5ses %all 
be tak5 into acc\nt "u subsection 7a7 9 
! fir/ taxable ye> aft] ! taxable ye>   
describ$ 9 p>agraph 7#a74  7e7          

,possessions treat$ z "p ( ! ,unit$     
,/ates ,= purposes ( ?is section1 ! t]m 
,unit$ ,/ates %all be treat$ z includ+  
ea* possession ( ! ,unit$ ,/ates        
7includ+ ! ,commonweal? ( ,pu]to ,rico &
 ! ,commonweal? ( ! ,nor!rn ,m>iana     
,isl&s74  7f7 ,regulations ,! ,secret>y 
%all prescribe su* regulations or o!r   
guidance z may be necess>y or           
appropriate to c>ry out ! purposes ( ?is
 section4  4  7b7 ,cr$it ,to ,be ,"p (  
,g5]al ,bus9ess ,cr$it ,section #ch7;b7 
( su* ,code is am5d$ by /rik+ plus at ! 
end ( p>agraph 7#cb71 by /rik+ ! p]iod  
at ! end ( p>agraph 7#cc7 & ins]t+ 1    
plus1 & by add+ at ! end ! foll[+ new   
p>agraph3  7#cd7 ! ins\rc+ exp5ses cr$it
 det]m9$ "u section #de,u7a74  4  7c7   
,con=m+ am5dm5ts  7#a7 ,section #bhj;,c 
( su* ,code is am5d$ by add+ at ! end ! 
foll[+ new subsection3  7i7 ,cr$it =    
ins\rc+ exp5ses ,no d$uction %all be    
all[$ = t portion ( ! exp5ses o!rwise   
all[able z a d$uction tak5 into acc\nt 9
 det]m9+ ! cr$it "u section #de,u = !   

taxable ye> :i* is equal to ! am\nt ( ! 
cr$it det]m9$ = su* taxable ye> "u      
section #de,u7a74  4  7#b7 ,! table (   
sections = subp>t ,d ( "p ,,iv (        
sub*apt] ,a ( *apt] #a ( su* ,code is   
am5d$ by add+ at ! end ! foll[+ new     
item3  ,sec4 #de,u4 ,cr$it = ins\rc+    
exp5ses4  4  7d7 ,effective date ,!     
am5dm5ts made by ?is section %all apply 
to am\nts paid or incurr$ aft] ! date ( 
! enactm5t ( ?is ,act4  7e7 ,application
 to ,unit$ ,/ates possessions  7#a7     
,paym5ts to possessions  7,a7 ,mirror   
code possessions ,! ,secret>y ( !       
,treasury %all make p]iodic paym5ts to !
 ,unit$ ,/ates ,virg9 ,isl&s1 ,guam1 & !
 ,commonweal? ( ! ,nor!rn ,m>iana ,isl&s
 9 an am\nt equal to ! loss to t        
possession by reason ( section #de,u ( !
 ,int]nal ,rev5ue ,code ( #aihf4 ,su*   
am\nt %all be det]m9$ by ! ,secret>y ( !
 ,treasury bas$ on in=mation provid$ by 
! gov]nm5t ( ! respective possession4   
7,b7 ,o!r possessions ,! ,secret>y ( !  
,treasury %all make annual paym5ts to ! 

,commonweal? ( ,pu]to ,rico & ,am]ican  
,samoa 9 an am\nt e/imat$ by ! ,secret>y
 ( ! ,treasury z be+ equal to !         
aggregate b5efits t w\ld h be5 provid$  
to resid5ts ( ea* su* possession by     
reason ( section #de,u ( su* ,code if a 
mirror code tax sy/em _h be5 9 effect 9 
su* possession4 ,! prec$+ s5t5ce %all n 
apply ) respect to any possession ( !   
,unit$ ,/ates unless su* possession has 
a plan1 :i* has be5 approv$ by !        
,secret>y ( ! ,treasury1 "u :i* su*     
possession w promptly di/ribute su*     
paym5t to ! resid5ts ( su* possession4  
7#b7 ,coord9ation ) cr$it all[$ aga9/   
,unit$ ,/ates income taxes ,no cr$it    
%all be all[$ aga9/ ,unit$ ,/ates income
 taxes "u section #de,u ( su* ,code to  
any p]son-- 7,a7 to :om a cr$it is all[$
 aga9/ taxes impos$ by ! possession by  
reason ( su* section1 or  7,b7 :o is    
eligible = a paym5t "u a plan describ$ 9
 p>agraph 7#a77;,b74  7#c7 ,treatm5t (  
paym5ts ,= purposes ( section           
#acbd7;b77#b7 ( title #ca1 ,unit$ ,/ates

 ,code1 ! paym5ts "u ?is section %all be
 treat$ 9 ! same mann] z a refund due f 
sections ref]r$ to 9 su* section        
#acbd7;b77#b74  #c4 ,d5ial ( d$uction = 
outs\rc+ exp5ses  7a7 ,9 g5]al ,"p ,,ix 
( sub*apt] ,b ( *apt] #a ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new section3  #bhj;,i4
 ,outs\rc+ exp5ses  7a7 ,9 g5]al ,no    
d$uction o!rwise all[able "u ?is *apt]  
%all be all[$ = any specifi$ outs\rc+   
exp5se4  7b7 ,specifi$ outs\rc+ exp5se  
,= purposes ( ?is section-- 7#a7 ,9     
g5]al ,! t]m specifi$ outs\rc+ exp5se   
means-- 7,a7 any eligible exp5se paid or
 incurr$ by ! taxpay] 9 connection ) !  
elim9ation ( any bus9ess unit ( !       
taxpay] 7or ( any memb] ( any exp&$     
affiliat$ gr\p 9 :i* ! taxpay] is also a
 memb]7 locat$ )9 ! ,unit$ ,/ates1 &    
7,b7 any eligible exp5se paid or incurr$
 by ! taxpay] 9 connection ) !          
e/abli%m5t ( any bus9ess unit ( !       
taxpay] 7or ( any memb] ( any exp&$     
affiliat$ gr\p 9 :i* ! taxpay] is also a

 memb]7 locat$ outside ! ,unit$ ,/ates1 
if su* e/abli%m5t con/itutes !          
relocation ( bus9ess unit s elim9at$4 ,=
 purposes ( ! prec$+ s5t5ce1 a          
relocation %all n be treat$ z fail+ to  
occur m]ely because su* elim9ation      
occurs 9 a diff]5t taxable ye> ?an su*  
e/abli%m5t4  7#b7 ,application ( c]ta9  
def9itions & rules  7,a7 ,def9itions ,= 
purposes ( ?is section1 ! t]ms eligible 
exp5ses1 bus9ess unit1 & exp&$ affiliat$
 gr\p %all h ! respective mean+s giv5   
su* t]ms by section #de,u7b74  7,b7     
,op]at+ exp5ses n tak5 into acc\nt ,a   
rule simil> to ! rule ( section         
#de,u7b77#f7 %all apply = purposes ( ?is
 section4  7c7 ,special rules  7#a7     
,application to d$uctions = depreciation
 & amortization ,9 ! case ( any portion 
( a specifi$ outs\rc+ exp5se :i* is n   
d$uctible 9 ! taxable ye> 9 :i* paid or 
incurr$1 su* portion %all nei!r be      
*>geable to capital acc\nt nor          
amortizable4  7#b7 ,possessions treat$ z
 "p ( ! ,unit$ ,/ates ,= purposes ( ?is 

section1 ! t]m ,unit$ ,/ates %all be    
treat$ z includ+ ea* possession ( !     
,unit$ ,/ates 7includ+ ! ,commonweal? ( 
,pu]to ,rico & ! ,commonweal? ( !       
,nor!rn ,m>iana ,isl&s74  7d7           
,regulations ,! ,secret>y %all prescribe
 su* regulations or o!r guidance z may  
be necess>y or appropriate to c>ry out !
 purposes ( ?is section1 includ+        
regulations :i* provide 7or create a    
rebuttable presumption7 t c]ta9         
e/abli%m5ts ( bus9ess units outside !   
,unit$ ,/ates w be treat$ z relocations 
7bas$ on tim+ or su* o!r factors z !    
,secret>y may provide7 ( bus9ess units  
elim9at$ )9 ! ,unit$ ,/ates4  4  7b7    
,limitation on subp>t ,f income (       
controll$ =eign corporations det]m9$ )\t
 reg>d to specifi$ outs\rc+ exp5ses     
,section #ieb7;c7 ( su* ,code is am5d$  
by add+ at ! end ! foll[+ new p>agraph3 
7#d7 ,e>n+s & pr(its det]m9$ )\t reg>d  
to specifi$ outs\rc+ exp5ses ,= purposes
 ( ?is subsection1 e>n+s & pr(its ( any 
controll$ =eign corporation %all be     

det]m9$ )\t reg>d to any specifi$       
outs\rc+ exp5se 7z def9$ 9 section      
#bhj;,i7b774  4  7c7 ,cl]ical am5dm5t ,!
 table ( sections = "p ,,ix ( sub*apt]  
,b ( *apt] #a ( su* ,code is am5d$ by   
add+ at ! end ! foll[+ new item3  ,sec4 
#bhj;,i4 ,outs\rc+ exp5ses4  4  7d7     
,effective date ,! am5dm5ts made by ?is 
section %all apply to am\nts paid or    
incurr$ aft] ! date ( ! enactm5t ( ?is  
,act4  #d4 ,re9/atem5t ( d$uction = mov+
 exp5ses  7a7 ,9 g5]al ,section #bag ( !
 ,int]nal ,rev5ue ,code ( #aihf is am5d$
 by /rik+ subsection 7k74  7b7          
,effective date ,! am5dm5t made by ?is  
section %all apply to taxable ye>s end+ 
aft] ! date ( ! enactm5t ( ?is ,act4