I 
112TH CONGRESS 
2D SESSION 
H. R. 5795 
To amend the Internal Revenue Code of 1986 to reduce the rate of tax 
on domestic manufacturing income to 20 percent. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 17, 2012 
Mr. KIND (for himself, Mr. LEVIN, Mr. RANGEL, Mr. MCDERMOTT, Mr. 
LEWIS of Georgia, Mr. NEAL, Mr. LARSON of Connecticut, Mr. PAS-
CRELL, Mr. CROWLEY, and Mr. STARK) 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 reduce 
the rate of tax on domestic manufacturing income to 
20 percent. 
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 ‘‘Rebuilding American 
Manufacturing Act of 2012’’. 
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SEC. 2. 20 PERCENT INCOME TAX RATE FOR DOMESTIC 
MANUFACTURING INCOME. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new section: 
‘‘SEC. 200. DOMESTIC MANUFACTURING INCOME. 
‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be 
allowed as a deduction an amount equal to 43 percent of 
the lesser of— 
‘‘(1) the domestic manufacturing income of the 
taxpayer for the taxable year, or 
‘‘(2) taxable income (determined without regard 
to this section and section 199) for the taxable year. 
‘‘(b) LIMITATION BASED
ON DOMESTIC INVEST-
MENT.—For purposes of this section— 
‘‘(1) IN GENERAL.—The amount of the deduc-
tion allowable under subsection (a) for any taxable 
year shall not exceed 25 percent of the taxpayer’s 
qualifying domestic investment for the taxable year. 
‘‘(2) 
QUALIFYING
DOMESTIC
INVESTMENT 
AMOUNT.—The term ‘qualifying domestic invest-
ment’ means, with respect to any taxpayer for any 
taxable year, the sum of— 
‘‘(A) the W–2 wages of such taxpayer for 
such taxable year, 
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‘‘(B) the sum of the deductions allowable 
under sections 167, 169, 179, and 179D to 
such taxpayer for such taxable year, plus 
‘‘(C) the deduction allowable under section 
174 to such taxpayer for such taxable year. 
‘‘(3) W–2 WAGES.—The term ‘W–2 wages’ 
means, with respect to any person for any taxable 
year, the sum of the amounts described in para-
graphs (3) and (8) of section 6051(a) paid by such 
person with respect to employment of employees by 
such person during the calendar year ending during 
such taxable year. Such term shall not include any 
amount which is not properly included in a return 
filed with the Social Security Administration on or 
before the 60th day after the due date (including ex-
tensions) for such return. 
‘‘(4) LIMITATION TO AMOUNTS ATTRIBUTABLE 
TO DOMESTIC PRODUCTION.—The term ‘qualifying 
domestic investment’ shall not include any amount 
which is not properly allocable to domestic manufac-
turing gross receipts for purposes of subsection (c) 
(and shall include any amount which is so allocable 
under subsection (c)(4)). 
‘‘(5) ACQUISITIONS
AND
DISPOSITIONS.—The 
Secretary shall provide for the application of this 
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subsection in cases where the taxpayer acquire, or 
disposes of, the major portion of a trade or business 
or the major portion of a separate unit of a trade 
or business during the taxable year. 
‘‘(c) DOMESTIC
MANUFACTURING
INCOME.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘domestic manu-
facturing income’ for any taxable year means an 
amount equal to the excess (if any) of— 
‘‘(A) the taxpayer’s domestic manufac-
turing gross receipts for such taxable year, over 
‘‘(B) the sum of— 
‘‘(i) the cost of goods sold that are al-
locable to such receipts, and 
‘‘(ii) other expenses, losses, or deduc-
tions (other than the deduction allowed 
under this section), which are properly al-
locable to such receipts. 
‘‘(2) ALLOCATION
METHOD.—The Secretary 
shall prescribe rules for the proper allocation of 
items described in paragraph (1) for purposes of de-
termining domestic manufacturing income. Such 
rules shall provide for the proper allocation of items 
whether or not such items are directly allocable to 
domestic manufacturing gross receipts. 
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‘‘(3) 
SPECIAL
RULES
FOR
DETERMINING 
COSTS.— 
‘‘(A) IN GENERAL.—For purposes of deter-
mining costs under clause (i) of paragraph 
(1)(B), any item or service brought into the 
United States shall be treated as acquired by 
purchase, and its cost shall be treated as not 
less than its value immediately after it entered 
the United States. A similar rule shall apply in 
determining the adjusted basis of leased or 
rented property where the lease or rental gives 
rise to domestic manufacturing gross receipts. 
‘‘(B) EXPORTS FOR FURTHER MANUFAC-
TURE.—In the case of any property described 
in subparagraph (A) that had been exported by 
the taxpayer for further manufacture, the in-
crease in cost or adjusted basis under subpara-
graph (A) shall not exceed the difference be-
tween the value of the property when exported 
and the value of the property when brought 
back into the United States after the further 
manufacture. 
‘‘(4) TREATMENT OF CERTAIN ACCELERATED 
DEPRECIATION DEDUCTIONS.—In the case of prop-
erty placed in service after December 31, 2007, and 
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the taxpayer which are derived from any lease, rent-
al, license, sale, exchange, or other disposition of 
qualified property which was manufactured, pro-
duced, or grown by the taxpayer in whole or in sig-
nificant part within the United States. Such term 
shall not include gross receipts of the taxpayer which 
are derived from the sale of food and beverages pre-
pared by the taxpayer at a retail establishment. 
‘‘(2) SPECIAL
RULE
FOR
CERTAIN
GOVERN-
MENT CONTRACTS.—Gross receipts derived from the 
manufacture or production of any property shall not 
fail to be treated as meeting the requirements of 
paragraph (1) solely because title or risk of loss with 
respect to such property is held by the Federal Gov-
ernment if— 
‘‘(A) such property is manufactured or 
produced by the taxpayer pursuant to a con-
tract with the Federal Government, and 
‘‘(B) the Federal Acquisition Regulation 
requires that title or risk of loss with respect to 
such property be transferred to the Federal 
Government before the manufacture or produc-
tion of such property is complete. 
‘‘(3) QUALIFIED PROPERTY.—The term ‘quali-
fied property’ means— 
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‘‘(A) any tangible personal property other 
than— 
‘‘(i) oil, gas, and primary products 
thereof (within the meaning of section 
199(d)(9)(C)), 
‘‘(ii) property with respect to which 
section 613 applies, 
‘‘(iii) property described in paragraph 
(3) or (4) of section 168(f), and 
‘‘(iv) electricity and potable water, 
and 
‘‘(B) any computer software other than 
video games rated M, AO, RP, or any similar 
rating as determined by the Secretary, by the 
Entertainment Software Rating Board. 
‘‘(4) PARTNERSHIPS OWNED BY EXPANDED AF-
FILIATED GROUPS.—For purposes of this subsection, 
if all of the interests in the capital and profits of a 
partnership are owned by members of a single ex-
panded affiliated group at all times during the tax-
able year of such partnership, the partnership and 
all members of such group shall be treated as a sin-
gle taxpayer during such period. 
‘‘(5) RELATED PERSONS.— 
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‘‘(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 subsections 
(b) or (c)) shall not be taken into account under sec-
tion 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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