Real Corporate Profits Tax Act of 2021
Bill: S.2680 | Sponsor: Sen. Warren, Elizabeth (D-MA)
Policy area: Taxation

Summary:
Real Corporate Profits Tax Act of 2021
This bill imposes an additional 7% tax on the adjusted net book income of a corporation that exceeds $100 million. It also allows a credit for a taxpayer, other than an S corporation, for a specified percentage of the taxpayer's net regular tax liability.

To amend the Internal Revenue Code of 1986 to impose a tax on real 
                    profits of certain corporations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Real Corporate Profits Tax Act of 
2021''.

SEC. 2. IMPOSITION OF ADDITIONAL TAX ON REAL CORPORATE PROFITS.

    (a) Imposition of Tax.--
            (1) In general.--Subtitle A of the Internal Revenue Code of 
        1986 is amended by adding at the end the following new chapter:

               ``CHAPTER 4A--TAX ON CORPORATE BOOK INCOME

``Sec. 1476. Tax on book income.
``Sec. 1477. Credit for income taxes paid.

``SEC. 1476. TAX ON BOOK INCOME.

    ``(a) In General.--In addition to any other tax, in the case of a 
corporation, there is imposed a tax for each taxable year on so much of 
the adjusted net book income of the corporation as exceeds 
$100,000,000.
    ``(b) Amount of Tax.--The amount of tax imposed under subsection 
(a) shall be 7 percent.
    ``(c) Adjusted Net Book Income.--For purposes of this section--
            ``(1) In general.--The term `adjusted net book income' 
        means the net income or loss of the taxpayer set forth on the 
        taxpayer's applicable financial statement as required to be 
        reported (or as would have been properly reported if the 
        taxpayer were so required) on the taxpayer's financial 
        statement net income or loss reconciliation for the fiscal year 
        ending with or within such taxable year, determined without 
        regard to the tax imposed by this section and adjusted as 
        provided in this subsection.
            ``(2) Group of entities.--For purposes of this subsection--
                    ``(A) if the financial results of a taxpayer are 
                reported on the applicable financial statement for a 
                group of entities, such statement shall be treated as 
                the applicable financial statement of the taxpayer, and
                    ``(B) if the taxpayer files a consolidated return 
                for any taxable year, adjusted net book income for such 
                taxable year shall take into account items on the 
                taxpayer's applicable financial statement which are 
                properly allocable to members of such group included on 
                such return.
            ``(3) Applicable financial statement.--For purposes of this 
        subsection, the term `applicable financial statement' has the 
        meaning given such term under section 451(b)(3).
    ``(d) Exception.--Subsection (a) shall not apply to a corporation 
subject to the tax imposed under subchapter M (relating to regulated 
investment companies and real estate investment trusts).
    ``(e) Application to Foreign Corporations.--In the case of a 
foreign corporation, the tax imposed by subsection (a) shall apply only 
to those items on the taxpayer's applicable financial statement as are 
properly allocable to the income of the taxpayer which is effectively 
connected with the conduct of a trade or business within the United 
States (as determined under rules similar to the rules in section 882).
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
and guidance as necessary to carry out the purposes of this section, 
including regulations and guidance related to the application of this 
section to consolidated financial statements.

``SEC. 1477. CREDIT FOR INCOME TAXES PAID.

    ``(a) In General.--In the case of a taxpayer other than an S 
corporation, there shall be allowed a credit against the tax imposed by 
section 1476 for any taxable year an amount equal to 33 percent of so 
much of the taxpayer's net regular tax liability for the taxable year 
as exceeds the product of--
            ``(1) the highest rate of tax specified in section 11, and
            ``(2) the dollar amount described in section 1476(a).
    ``(b) Net Regular Tax Liability.--For purposes of this section, the 
term `net regular tax liability' means the regular tax liability 
imposed under chapter 1 reduced by the sum of the credits allowable 
under subparts A, B and D of part IV of subchapter A of chapter 1.''.
            (2) Clerical amendment.--The table of chapter for the 
        Internal Revenue Code of 1986 is amended to read as follows:

             ``Chapter 4A--Tax on Corporate Book Income''.

    (b) Denial of Income Tax Deduction.--Section 275(a)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of paragraph (2), by striking the period at the end of paragraph (3) 
and inserting ``; and'', and by adding at the end the following new 
paragraph:
            ``(4) the tax imposed by chapter 4A.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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