387 
the United States are treated as business pur-
chases. 
‘‘SEC. 269. INTERNATIONAL COMMUNICATIONS. 
‘‘(a) IN GENERAL.—For purposes of section 266, 
communications services shall be treated as provided at 
the point of origin of the communications and shall not 
be treated as imported or exported. 
‘‘(b) COMMUNICATIONS SERVICES.—Communications 
services include— 
‘‘(1) telephone communications services, 
‘‘(2) courier services (except in the case of 
transportation of property that is imported or ex-
ported), 
‘‘(3) satellite transmission services, 
‘‘(4) telegraph services, 
‘‘(5) facsimile transmission services, and 
‘‘(6) other similar services. 
‘‘SEC. 270. INSURANCE. 
‘‘(a) IN GENERAL.—Insurance services will be treat-
ed as provided at the location of the insurance company 
providing the services. Except as the Secretary may pre-
scribe by regulations, insurance companies will be treated 
as providing services at the location to which insurance 
payments are made.
388 
‘‘(b) INSURED RISKS IN THE UNITED STATES.—If 
insurance services are provided outside the United States 
and the insured risk is located in the United States— 
‘‘(1) the insurance service shall be treated as 
imported, 
‘‘(2) the insurance premiums shall be subject to 
the import tax, and 
‘‘(3) payments of insurance benefits shall not be 
treated as imported. 
‘‘(c) 
INSURED
RISK
OUTSIDE
THE
UNITED 
STATES.—If insurance services are provided inside the 
United States and the insured risk is located outside the 
United States— 
‘‘(1) insurance services shall be treated as ex-
ported, 
‘‘(2) payments of insurance benefits shall be 
treated as payments for services outside the United 
States, and shall not be deducted as business pur-
chases. 
‘‘(d) INSURANCE
SERVICES.—Insurance services 
means the provision of insurance and services related to 
insurance other than insurance that is treated as a savings 
asset.
389 
‘‘SEC. 271. BANKING SERVICES. 
‘‘The Secretary shall prescribe regulations on the lo-
cation of banking services and the extent to which such 
services are to be treated as imported or exported. 
‘‘Subchapter K—Business Conducted in a 
Possession 
‘‘Sec. 276. Treatment of possessions. 
‘‘SEC. 276. TREATMENT OF POSSESSIONS. 
‘‘(a) IN GENERAL.—For purposes of the business tax 
imposed by this chapter, the U.S. possessions shall not 
be treated as part of the United States. 
‘‘(b) EFFECT ON PAYROLL TAX CREDIT.—A busi-
ness entity may not claim a payroll tax credit with respect 
to any payroll taxes paid with respect to income of resi-
dents of the U.S. possessions. 
‘‘(c) POSSESSION.—For purposes of this subchapter, 
‘U.S. possession’ or ‘possession’ means a possession of the 
United States and includes the Commonwealth of Puerto 
Rico and the Virgin Islands. 
‘‘Subchapter L—Payroll Tax Credit 
‘‘Sec. 281. Amount of credit. 
‘‘Sec. 282. Current-year payroll tax credit. 
‘‘Sec. 283. Credit carryover. 
‘‘SEC. 281. AMOUNT OF CREDIT. 
‘‘(a) AMOUNT OF CREDIT.—The payroll tax credit for 
a business entity for a taxable year is the lesser of— 
‘‘(1) the sum of—
390 
‘‘(A) the current-year payroll tax credit, 
and 
‘‘(B) the credit carryovers to the taxable 
year, or 
‘‘(2) the business entity’s business tax for the 
taxable year (determined without regard to the pay-
roll tax credit). 
‘‘(b) CONSOLIDATED RETURNS.—In the case of busi-
ness entities filing consolidated returns, the amount of the 
credit shall be determined using the combined payroll tax 
credits and credit carryovers of the business entities and 
the combined business tax of the business entities. 
‘‘SEC. 282. CURRENT-YEAR PAYROLL TAX CREDIT. 
‘‘(a) IN GENERAL.—The ‘current-year payroll tax 
credit’ is an amount equal to the sum of— 
‘‘(1) the employer’s share of the FICA tax im-
posed on wages of its employees during the taxable 
year, 
‘‘(2) the employer’s share of the tier 1 railroad 
retirement tax for its employees during the taxable 
year, 
‘‘(3) one-half of the allocable portion of the 
SECA tax imposed on individuals (other than inde-
pendent contractors and other business entities) who 
provide services to the business entity.
391 
‘‘(b) DEFINITIONS.— 
‘‘(1) EMPLOYER’S SHARE OF THE FICA TAX.— 
‘Employer’s share of the FICA tax’ means the old- 
age, survivors, disability and hospital insurance 
taxes imposed by section 3111. 
‘‘(2) EMPLOYER’S SHARE OF THE TIER 1 RAIL-
ROAD RETIREMENT TAX.—‘Employer’s share of the 
tier 1 railroad retirement tax’ means— 
‘‘(A) the tier 1 railroad retirement tax im-
posed by section 3221(a), and 
‘‘(B) the portion of the tax imposed by sec-
tion 3211(a)(1) on employee representatives at-
tributable to the tax imposed by section 3111. 
‘‘(3) ONE-HALF OF THE ALLOCABLE PORTION 
OF THE SECA TAX.— 
‘‘(A) SECA TAX.—‘SECA tax’ means the 
self-employment tax imposed by section 1401. 
‘‘(B) PARTNERSHIPS.—Until such time as 
the SECA tax and the Federal Insurance Con-
tributions Acts are amended to treat partners 
of partnerships as employees, if a partner des-
ignates a partnership as a principal source of 
employment income for the taxable year, one- 
half of the partnership’s allocable portion of the 
SECA tax of such partner equals the FICA tax