I 
115TH CONGRESS 
1ST SESSION H. R. 2005 
To amend the Internal Revenue Code of 1986 to provide for the taxation 
of income of controlled foreign corporations attributable to imported property. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 6, 2017 
Mr. CICILLINE introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for the taxation of income of controlled foreign corpora-
tions attributable to imported property. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Offshoring Prevention 
Act’’. 
SEC. 2. TAXATION OF INCOME OF CONTROLLED FOREIGN 
CORPORATIONS 
ATTRIBUTABLE 
TO 
IM-
PORTED PROPERTY. 
(a) IN GENERAL.—Section 954(a) of the Internal 
Revenue Code of 1986 is amended by striking the period 
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at the end of paragraph (5) and inserting ‘‘, and’’, by re-
designating paragraph (5) as paragraph (4), and by add-
ing at the end the following new paragraph: 
‘‘(5) imported property income for the taxable 
year (determined under subsection (j) and reduced 
as provided in subsection (b)(5)).’’. 
(b) IMPORTED PROPERTY INCOME DEFINED.—Sec-
tion 954 of such Code is amended by adding at the end 
the following new subsection: 
‘‘(j) IMPORTED PROPERTY INCOME.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(5), the term ‘imported property income’ means 
income (whether in the form of profits, commissions, 
fees, or otherwise) derived in connection with— 
‘‘(A) manufacturing, producing, growing, 
or extracting imported property; 
‘‘(B) the sale, exchange, or other disposi-
tion of imported property; or 
‘‘(C) the lease, rental, or licensing of im-
ported property. 
Such term shall not include any foreign oil and gas 
extraction income (within the meaning of section 
907(c)) or any foreign oil related income (within the 
meaning of section 907(c)). 
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‘‘(2) IMPORTED PROPERTY.—For purposes of 
this subsection— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, the term ‘imported 
property’ means property which is imported 
into the United States by the controlled foreign 
corporation or a related person. 
‘‘(B) IMPORTED PROPERTY INCLUDES CER-
TAIN
PROPERTY
IMPORTED
BY
UNRELATED 
PERSONS.—The term ‘imported property’ in-
cludes any property imported into the United 
States by an unrelated person if, when such 
property was sold to the unrelated person by 
the controlled foreign corporation (or a related 
person), it was reasonable to expect that— 
‘‘(i) such property would be imported 
into the United States; or 
‘‘(ii) such property would be used as 
a component in other property which would 
be imported into the United States. 
‘‘(C) EXCEPTION FOR PROPERTY SUBSE-
QUENTLY
EXPORTED.—The term ‘imported 
property’ does not include any property which is 
imported into the United States and which— 
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‘‘(i) before substantial use in the 
United States, is sold, leased, or rented by 
the controlled foreign corporation or a re-
lated person for direct use, consumption, 
or disposition outside the United States; or 
‘‘(ii) is used by the controlled foreign 
corporation or a related person as a com-
ponent in other property which is so sold, 
leased, or rented. 
‘‘(D) EXCEPTION FOR CERTAIN AGRICUL-
TURAL
COMMODITIES.—The term ‘imported 
property’ does not include any agricultural com-
modity which is not grown in the United States 
in commercially marketable quantities. 
‘‘(3) DEFINITIONS AND SPECIAL RULES.— 
‘‘(A) IMPORT.—For purposes of this sub-
section, the term ‘import’ means entering, or 
withdrawal from warehouse, for consumption or 
use. Such term includes any grant of the right 
to use intangible property (as defined in section 
936(h)(3)(B)) in the United States. 
‘‘(B) UNITED
STATES.—For purposes of 
this subsection, the term ‘United States’ in-
cludes the Commonwealth of Puerto Rico, the 
Virgin Islands of the United States, Guam, 
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American Samoa, and the Commonwealth of 
the Northern Mariana Islands. 
‘‘(C) UNRELATED PERSON.—For purposes 
of this subsection, the term ‘unrelated person’ 
means any person who is not a related person 
with respect to the controlled foreign corpora-
tion. 
‘‘(D) COORDINATION WITH FOREIGN BASE 
COMPANY SALES INCOME.—For purposes of this 
section, the term ‘foreign base company sales 
income’ shall not include any imported property 
income.’’. 
(c) SEPARATE APPLICATION
OF LIMITATIONS
ON 
FOREIGN TAX CREDIT FOR IMPORTED PROPERTY IN-
COME.— 
(1) IN GENERAL.—Section 904(d)(1) of such 
Code is amended by striking ‘‘and’’ at the end of 
subparagraph (A), by redesignating subparagraph 
(B) as subparagraph (C), and by inserting after sub-
paragraph (A) the following new subparagraph: 
‘‘(B) imported property income, and’’. 
(2) IMPORTED PROPERTY INCOME DEFINED.— 
Section 904(d)(2) of such Code is amended by redes-
ignating subparagraphs (I), (J), and (K) as sub-
paragraphs (J), (K), and (L), respectively, and by 
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inserting after subparagraph (H) the following new 
subparagraph: 
‘‘(I) IMPORTED PROPERTY INCOME.—The 
term ‘imported property income’ means any in-
come received or accrued by any person which 
is of a kind which would be imported property 
income (as defined in section 954(j)).’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
904(d)(2)(A)(ii) of such Code is amended by insert-
ing ‘‘or imported property income’’ after ‘‘passive 
category income’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 952(c)(1)(B)(iii) of such Code is 
amended— 
(A) by redesignating subclauses (II), (III), 
(IV), and (V) as subclauses (III), (IV), (V), and 
(VI), and 
(B) by inserting after subclause (I) the fol-
lowing new subclause: 
‘‘(II) 
imported 
property 
in-
come,’’. 
(2) The last sentence of section 954(b)(4) of 
such Code is amended by striking ‘‘subsection 
(a)(5)’’ and inserting ‘‘subsection (a)(4)’’. 
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(3) Section 954(b)(5) of such Code is amended 
by striking ‘‘and the foreign base company oil re-
lated income’’ and inserting ‘‘the foreign base com-
pany oil related income, and the imported property 
income’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years of foreign corpora-
tions beginning after the date of the enactment of this 
Act, and to taxable years of United States shareholders 
within which or with which such taxable years of such for-
eign corporations end. 
Æ 
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