Medical Device Tax Elimination Act

Summary: Medical Device Tax Elimination Act This bill amends the Internal Revenue Code to repeal the excise tax on medical devices and offsets the cost of such repeal by: (1) eliminating the tax deduction for income attributable to oil, natural gas, or primary products thereof for major integrated oil companies (companies that have an average daily worldwide annual production of crude oil of at least 500,000 barrels and annual gross receipts in excess of $1 billion); (2) prohibiting the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies; and (3) denying the foreign tax credit to major integrated oil companies that are dual taxpayers (companies that receive an economic benefit from a foreign country or a possession of the United States that does not impose a generally applicable income tax).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medical Device Tax Elimination 
Act''.

SEC. 2. REPEAL OF MEDICAL DEVICE EXCISE TAX.

    (a) In General.--Chapter 32 of the Internal Revenue Code of 1986 is 
amended by striking subchapter E.
    (b) Conforming Amendments.--
            (1) Section 4221(a) of such Code is amended by striking the 
        last sentence.
            (2) Section 6416(b)(2) of such Code is amended by striking 
        the last sentence.
    (c) Clerical Amendment.--The table of subchapters for chapter 32 of 
such Code is amended by striking the item relating to subchapter E.
    (d) Effective Date.--The amendments made by this section shall 
apply to sales after the date of the enactment of this Act.

SEC. 3. LIMITATION ON SECTION 199 DEDUCTION ATTRIBUTABLE TO OIL, 
              NATURAL GAS, OR PRIMARY PRODUCTS THEREOF.

    (a) Denial of Deduction.--Section 199(c)(4) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(E) Special rule for certain oil and gas 
                income.--In the case of any taxpayer who is a major 
                integrated oil company (as defined in section 
                167(h)(5)(B)) for the taxable year, the term `domestic 
                production gross receipts' shall not include gross 
                receipts from the production, transportation, or 
                distribution of oil, natural gas, or any primary 
                product (within the meaning of subsection (d)(9)) 
                thereof.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2014.

SEC. 4. PROHIBITION ON USING LAST-IN, FIRST-OUT ACCOUNTING FOR MAJOR 
              INTEGRATED OIL COMPANIES.

    (a) In General.--Section 472 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(h) Major Integrated Oil Companies.--Notwithstanding any other 
provision of this section, a major integrated oil company (as defined 
in section 167(h)(5)(B)) may not use the method provided in subsection 
(b) in inventorying of any goods.''.
    (b) Effective Date and Special Rule.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to taxable years beginning after December 31, 2014.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by the amendment made by this section to 
        change its method of accounting for its first taxable year 
        beginning after December 31, 2014--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury, and
                    (C) the net amount of the adjustments required to 
                be taken into account by the taxpayer under section 481 
                of the Internal Revenue Code of 1986 shall be taken 
                into account ratably over a period (not greater than 8 
                taxable years) beginning with such first taxable year.

SEC. 5. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO MAJOR 
              INTEGRATED OIL COMPANIES WHICH ARE DUAL CAPACITY 
              TAXPAYERS.

    (a) In General.--Section 901 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (n) as subsection (o) and by 
inserting after subsection (m) the following new subsection:
    ``(n) Special Rules Relating to Major Integrated Oil Companies 
Which Are Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer which is a major integrated oil company (as defined in 
        section 167(h)(5)(B)) to a foreign country or possession of the 
        United States for any period shall not be considered a tax--
                    ``(A) if, for such period, the foreign country or 
                possession does not impose a generally applicable 
                income tax, or
                    ``(B) to the extent such amount exceeds the amount 
                (determined in accordance with regulations) which--
                            ``(i) is paid by such dual capacity 
                        taxpayer pursuant to the generally applicable 
                        income tax imposed by the country or 
                        possession, or
                            ``(ii) would be paid if the generally 
                        applicable income tax imposed by the country or 
                        possession were applicable to such dual 
                        capacity taxpayer.
                Nothing in this paragraph shall be construed to imply 
                the proper treatment of any such amount not in excess 
                of the amount determined under subparagraph (B).
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `generally applicable 
                income tax' means an income tax (or a series of income 
                taxes) which is generally imposed under the laws of a 
                foreign country or possession on income derived from 
                the conduct of a trade or business within such country 
                or possession.
                    ``(B) Exceptions.--Such term shall not include a 
                tax unless it has substantial application, by its terms 
                and in practice, to--
                            ``(i) persons who are not dual capacity 
                        taxpayers, and
                            ``(ii) persons who are citizens or 
                        residents of the foreign country or 
                        possession.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        December 31, 2014.
            (2) Contrary treaty obligations upheld.--The amendments 
        made by this section shall not apply to the extent contrary to 
        any treaty obligation of the United States.