II 

115TH CONGRESS 

1ST SESSION S. 1407 

To amend the Internal Revenue Code of 1986 to enhance tax incentives 

for manufacturing in the United States. 

IN THE SENATE OF THE UNITED STATES 

JUNE 22, 2017 

Mr. COONS (for himself and Mrs. CAPITO) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to enhance 

tax incentives for manufacturing in the United States. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Made in America De5 duction Enhancement (MADE) Act’’. 

6 SEC. 2. ENHANCED DEDUCTION FOR CERTAIN DOMESTIC 

7 PRODUCTION. 

8 (a) IN GENERAL.—Section 199 of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following new subsection: 


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1 ‘‘(e) ENHANCED MANUFACTURING DEDUCTION.— 

2 ‘‘(1) IN GENERAL.—If an eligible taxpayer has 

3 qualified core manufacturing income for any taxable 

4 year, the amount otherwise allowable as a deduction 

5 under subsection (a) shall be increased by the appli6 cable percentage of the least of— 

7 ‘‘(A) the qualified core manufacturing in8 come of the taxpayer for the taxable year, 

9 ‘‘(B) the qualified production activities in10 come of the taxpayer for the taxable year, or 

11 ‘‘(C) taxable income (determined without 

12 regard to this section). 

13 ‘‘(2) ELIGIBLE TAXPAYER.—For purposes of 

14 this subsection, the term ‘eligible taxpayer’ means, 

15 with respect to any taxable year, any taxpayer if the 

16 domestic input percentage for such taxable year is 

17 more than 75 percent. 

18 ‘‘(3) DOMESTIC INPUT PERCENTAGE.—For pur19 poses of this subsection— 

20 ‘‘(A) IN GENERAL.—The term ‘domestic 

21 input percentage’ means the ratio (expressed as 

22 a percentage) of— 

23 ‘‘(i) domestically produced input costs, 

24 to 


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1 ‘‘(ii) the total costs of direct material 

2 inputs included in the cost of goods sold 

3 which are allocable to gross receipts de4 rived from qualified property. 

5 ‘‘(B) DOMESTICALLY PRODUCED INPUT

6 COSTS.—For purposes of subparagraph (A)— 

7 ‘‘(i) IN GENERAL.—The term ‘domes8 tically produced input costs’ means the 

9 costs described in subparagraph (A)(ii) for 

10 materials— 

11 ‘‘(I) which become an integral 

12 part of property produced by the eligi13 ble taxpayer, or 

14 ‘‘(II) which can be identified or 

15 associated with particular units or 

16 groups of units of property produced 

17 by the eligible taxpayer, 

18 if all or virtually all of such material is 

19 produced in the United States. 

20 ‘‘(ii) DETERMINATION.—For purposes 

21 of this subparagraph— 

22 ‘‘(I) the determination of whether 

23 all or virtually all of a material is pro24 duced in the United States shall be 

25 made based on rules similar to the 


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1 guidelines of the Federal Trade Com2 mission with respect to goods adver3 tised as Made in USA, and 

4 ‘‘(II) all or virtually all of a ma5 terial shall not be treated as produced 

6 in the United States unless the tax7 payer has a reasonable basis to sup8 port such claim. 

9 ‘‘(iii) UNITED STATES.—For purposes 

10 of this subparagraph, the United States in11 cludes any possession of the United States. 

12 ‘‘(4) QUALIFIED CORE MANUFACTURING IN13 COME; QUALIFIED PROPERTY.—For purposes of this 

14 subsection— 

15 ‘‘(A) IN GENERAL.—The term ‘qualified 

16 core manufacturing income’ means for any tax17 able year the qualified production activities in18 come which is attributable to the manufacture 

19 of qualified property during such taxable year. 

20 ‘‘(B) QUALIFIED PROPERTY.—The term 

21 ‘qualified property’ means tangible personal 

22 property other than— 

23 ‘‘(i) a film, 

24 ‘‘(ii) computer software, 


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1 ‘‘(iii) property described in section 

2 168(f)(4), 

3 ‘‘(iv) a natural resource extracted by 

4 the taxpayer, or 

5 ‘‘(v) property produced in a farming 

6 business (within the meaning of section 

7 263A(e)(4)). 

8 ‘‘(5) APPLICABLE PERCENTAGE.—For purposes 

9 of paragraph (1), the applicable percentage is the 

10 percentage which bears the same ratio to 9 percent 

11 as— 

12 ‘‘(A) so much the domestic input percent13 age as exceeds 75 percent, bears to 

14 ‘‘(B) 25 percent.’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to taxable years beginning after 

17 the date of the enactment of this Act. 

Æ 


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