‘‘(A) IN
GENERAL.—The term ‘domestic 
manufacturing gross receipts’ shall not include 
any gross receipts of the taxpayer derived from 
property leased, licensed, or rented by the tax-
payer for use by any related person. 
‘‘(B) RELATED PERSON.—For purposes of 
subparagraph (A), a person shall be treated as 
related to another person if such persons are 
treated as a single employer under subsection 
(a) or (b) of section 52 or subsection (m) or (o) 
of section 414, except that determinations 
under subsections (a) and (b) of section 52 
shall be made without regard to section 
1563(b). 
‘‘(e) SPECIAL RULES.— 
‘‘(1) ELECTIVE APPLICATION OF DEDUCTION.— 
Except as otherwise provided by the Secretary, the 
taxpayer may elect not to take any item of income 
into account as domestic manufacturing gross re-
ceipts for purposes of this section. 
‘‘(2) COORDINATION WITH SECTION 199.—If a 
deduction is allowed under this section with respect 
to any taxpayer for any taxable year, any gross re-
ceipts of the taxpayer which are taken into account 
under this section for such taxable year (and any 
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items properly allocable thereto under subsection (b) 
or (c)) shall not be taken into account under section 
199 for such taxable year. 
‘‘(3) APPLICATION OF SECTION TO PASS-THRU 
ENTITIES.— 
‘‘(A) PARTNERSHIPS
AND
S
CORPORA-
TIONS.—In the case of a partnership or S cor-
poration— 
‘‘(i) this section shall be applied at the 
partner or shareholder level, 
‘‘(ii) each partner or shareholder shall 
take into account such person’s allocable 
share of each item described in subpara-
graph (A) or (B) of subsection (c)(1) (de-
termined without regard to whether the 
items described in such subparagraph (A) 
exceed the items described in such sub-
paragraph (B)), and 
‘‘(iii) each partner or shareholder 
shall be treated for purposes of subsection 
(b) as having an amount of each item 
taken into account in determining quali-
fying domestic investment of the partner-
ship or S corporation for the taxable year 
equal to such person’s allocable share of 
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such item (as determined under regula-
tions prescribed by the Secretary). 
‘‘(B) TRUST AND ESTATES.—In the case 
of a trust or estate— 
‘‘(i) the items referred to in subpara-
graph (A)(ii) (as determined therein) and 
the qualifying domestic investment of the 
trust or estate for the taxable year, shall 
be apportioned between the beneficiaries 
and the fiduciary (and among the bene-
ficiaries) under regulations prescribed by 
the Secretary, and 
‘‘(ii) for purposes of paragraph (4), 
adjusted gross income of the trust or es-
tate shall be determined as provided in sec-
tion 67(e) with the adjustments described 
in such paragraph. 
‘‘(C) REGULATIONS.—The Secretary may 
prescribe rules requiring or restricting the allo-
cation of items and qualifying domestic invest-
ment under this paragraph and may prescribe 
such reporting requirements as the Secretary 
determines appropriate. 
‘‘(4) APPLICATION
TO
INDIVIDUALS.—In the 
case of an individual, subsection (a)(2) shall be ap-
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plied by substituting ‘adjusted gross income’ for 
‘taxable income’. For purposes of the preceding sen-
tence, adjusted gross income shall be determined— 
‘‘(A) after application of sections 86, 135, 
137, 219, 221, 222, and 469, and 
‘‘(B) without regard to this section and 
section 199. 
‘‘(5) APPLICATION
OF
OTHER
RULES.—Rules 
similar to the rules of paragraphs (3), (4), (5), (6), 
(7), and (10) of section 199(d) shall apply for pur-
poses of this section.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 56(d)(1)(A) of such Code is amend-
ed by striking ‘‘deduction under section 199’’ both 
places it appears and inserting ‘‘deductions under 
sections 199 and 200’’. 
(2) Section 56(g)(4)(C) of such Code is amend-
ed by adding at the end the following new clause: 
‘‘(vii) DEDUCTION
FOR
DOMESTIC 
BUSINESS
INCOME.—Clause (i) shall not 
apply to any amount allowable as a deduc-
tion under section 200.’’. 
(3) The following provisions of such Code are 
each amended by inserting ‘‘200,’’ after ‘‘199,’’. 
(A) Section 86(b)(2)(A). 
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(B) Section 135(c)(4)(A). 
(C) Section 137(b)(3)(A). 
(D) Section 219(g)(3)(A)(ii). 
(E) Section 221(b)(2)(C)(i). 
(F) Section 222 (b)(2)(C)(i). 
(G) Section 246(b)(1). 
(H) Section 469(i)(3)(F)(iii). 
(4) Section 163(j)(6)(A)(i) of such Code is 
amended by striking ‘‘and’’ at the end of subclause 
(III) and by inserting after subclause (IV) the fol-
lowing new subclause: 
‘‘(V) any deduction allowable 
under section 200, and’’. 
(5) Section 170(b)(2)(C) of such Code is 
amended by striking ‘‘and’’ at the end of clause (iv), 
by striking the period at the end of clause (v) and 
inserting ‘‘, and’’, and by inserting after clause (v) 
the following new clause: 
‘‘(vi) section 200.’’. 
(6) Section 172(d) of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(8) DOMESTIC
BUSINESS
INCOME.—The de-
duction under section 200 shall not be allowed.’’. 
(7) Section 199(d)(2)(A) of such Code is 
amended by inserting ‘‘200,’’ after ‘‘137,’’. 
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(8) Section 613(a) of such Code is amended by 
striking ‘‘deduction under section 199’’ and insert-
ing ‘‘deductions under sections 199 and 200’’. 
(9) Section 613A(d)(1) of such Code is amend-
ed by redesignating subparagraphs (C), (D), and 
(E) as subparagraphs (D), (E), and (F), respec-
tively, and by inserting after subparagraph (B) the 
following new subparagraph: 
‘‘(C) any deduction allowable under section 
200,’’. 
(10) Section 1402(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (16), by 
redesignating paragraph (17) as paragraph (18), 
and by inserting after paragraph (16) the following 
new paragraph: 
‘‘(17) the deduction provided by section 200 
shall not be allowed; and’’. 
(11) The table of sections for part VI of sub-
chapter B of chapter 1 of such Code is amended by 
adding at the end the following new item: 
‘‘Sec. 200. Domestic manufacturing income.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
Æ 
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