I 
114TH CONGRESS 
1ST SESSION H. R. 2970 
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 
JULY 8, 2015 
Mr. KIND (for himself, Mr. NEAL, Mr. RANGEL, Mr. PASCRELL, Mr. LARSON 
of Connecticut, Mr. MCDERMOTT, Mr. DANNY K. DAVIS of Illinois, and 
Mr. LEVIN) introduced the following bill; which was referred to the Com-
mittee 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; FINDINGS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Rebuilding American Manufacturing Act of 2015’’. 
(b) FINDINGS.—Congress finds the following: 
(1) American manufacturing is vital to our 
economy, and those who produce American goods 
and hire American workers should be a priority. 
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(2) Manufacturing is an essential source of in-
novation that is critical to our continued prosperity 
in an increasingly competitive global economy. 
(3) Approximately 1.2 million Americans are 
employed by the manufacturing industry. 
(4) The manufacturing industry provides stable 
jobs with sustainable wages to Americans in every 
State. 
(5) Manufacturing jobs provide, on average, 
wages that are above the national average and pro-
vide a gateway to the middle class. 
(6) The effective tax rate of domestic manufac-
turers ranges from 27 to 31 percent, depending on 
location and the size of equipment used in produc-
tion. 
(7) Tax reform must make the United States 
more competitive, boost economic growth, and foster 
the creation of sustainable American jobs. 
(8) Tax reform should particularly focus on 
those companies that grow, build, and create goods 
in the United States. 
(9) The tax rate of domestic manufacturers 
should reflect the industry’s contributions of employ-
ment, growth, innovation, and competition in the 
United States. 
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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 50.5 percent 
(43 percent in the case of a C corporation) 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 acquires, 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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before the first taxable year of the taxpayer begin-
ning after December 31, 2014, the deduction under 
section 168 with respect to such property which is 
treated as properly allocable to domestic manufac-
turing gross receipts of the taxpayer for any taxable 
year shall be determined without regard to section 
168(k)(1). 
‘‘(5) TREATMENT
OF
DEFERRED
COMPENSA-
TION UNDER NONQUALIFIED PLANS.—In the case of 
compensation paid or incurred by the taxpayer which 
is deferred under a nonqualified deferred compensa-
tion plan (as defined in section 409A(d)(1)), the 
amount under paragraph (1)(B)(ii) shall be deter-
mined as though the deduction for such compensa-
tion is allowed for the taxable year in which the 
services for which such compensation was paid or in-
curred are performed. This paragraph shall not 
apply with respect to compensation paid or incurred 
for services performed in taxable years beginning be-
fore the first taxable year of the taxpayer beginning 
after December 31, 2014. 
‘‘(d) 
DOMESTIC
MANUFACTURING
GROSS
RE-
CEIPTS.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘domestic manu-
facturing gross receipts’ means the gross receipts of 
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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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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, 2014. 
Æ 
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