Made in America Deduction Enhancement (MADE) Act

To amend the Internal Revenue Code of 1986 to enhance tax incentives for manufacturing in the United States. 1. Short title This Act may be cited as the Made in America Deduction Enhancement (MADE) Act 2. Enhanced deduction for certain domestic production (a) In general Section 199 (e) Enhanced manufacturing deduction (1) In general If an eligible taxpayer has qualified core manufacturing income for any taxable year, the amount otherwise allowable as a deduction under subsection (a) shall be increased by the applicable percentage of the least of— (A) the qualified core manufacturing income of the taxpayer for the taxable year, (B) the qualified production activities income of the taxpayer for the taxable year, or (C) taxable income (determined without regard to this section). (2) Eligible taxpayer For purposes of this subsection, the term eligible taxpayer (3) Domestic input percentage For purposes of this subsection— (A) In general The term domestic input percentage (i) domestically produced input costs, to (ii) the total costs of direct material inputs included in the cost of goods sold which are allocable to gross receipts derived from qualified property. (B) Domestically produced input costs For purposes of subparagraph (A)— (i) In general The term domestically produced input costs (I) which become an integral part of property produced by the eligible taxpayer, or (II) which can be identified or associated with particular units or groups of units of property produced by the eligible taxpayer, if all or virtually all of such material is produced in the United States. (ii) Determination For purposes of this subparagraph— (I) the determination of whether all or virtually all of a material is produced in the United States shall be made based on rules similar to the guidelines of the Federal Trade Commission with respect to goods advertised as Made in USA, and (II) all or virtually all of a material shall not be treated as produced in the United States unless the taxpayer has a reasonable basis to support such claim. (iii) United States For purposes of this subparagraph, the United States includes any possession of the United States. (4) Qualified core manufacturing income; qualified property For purposes of this subsection— (A) In general The term qualified core manufacturing income (B) Qualified property The term qualified property (i) a film, (ii) computer software, (iii) property described in section 168(f)(4), (iv) a natural resource extracted by the taxpayer, or (v) property produced in a farming business (within the meaning of section 263A(e)(4)). (5) Applicable percentage For purposes of paragraph (1), the applicable percentage is the percentage which bears the same ratio to 9 percent as— (A) so much the domestic input percentage as exceeds 75 percent, bears to (B) 25 percent. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Made in America Deduction Enhancement (MADE) Act This bill amends the Internal Revenue Code, with respect to the deduction for income attributable to domestic production activities, to allow an increased deduction for manufacturers that use materials produced in the United States during their production process. The bill allows the increased deduction for taxpayers with a domestic input percentage that exceeds 75%. A "domestic input percentage" is the ratio of: (1) domestically produced input costs, to (2) the total costs of direct material inputs included in the cost of goods sold which are allocable to gross receipts derived from qualified property (tangible personal property other than a film, computer software, sound recordings, a natural resource extracted by the taxpayer, or property produced in a farming business). "Domestically produced input costs" are costs for materials which: (1) become an integral part of property produced by the eligible taxpayer; or (2) can be identified or associated with particular units or groups of units of property produced by the eligible taxpayer, if all or virtually all of the material is produced in the United States.