Title: Made in America Deduction Enhancement (MADE) Act
Policy area: Taxation

Summary:
Made in America Deduction Enhancement (MADE) Act
This bill amends the Internal Revenue Code, with respect to the deduction for income attributable to domestic production activities, to allow an increased deduction for manufacturers that use materials produced in the United States during their production process.
The bill allows the increased deduction for taxpayers with a domestic input percentage that exceeds 75%.
A "domestic input percentage" is the ratio of: (1) domestically produced input costs, to (2) the total costs of direct material inputs included in the cost of goods sold which are allocable to gross receipts derived from qualified property (tangible personal property other than a film, computer software, sound recordings, a natural resource extracted by the taxpayer, or property produced in a farming business).
"Domestically produced input costs" are costs for materials which: (1) become an integral part of property produced by the eligible taxpayer; or (2) can be identified or associated with particular units or groups of units of property produced by the eligible taxpayer, if all or virtually all of the material is produced in the United States.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1407 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                S. 1407

 To amend the Internal Revenue Code of 1986 to enhance tax incentives 
                for manufacturing in the United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 22, 2017

Mr. Coons (for himself and Mrs. Capito) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to enhance tax incentives 
                for manufacturing in the United States.

    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 ``Made in America Deduction 
Enhancement (MADE) Act''.

SEC. 2. ENHANCED DEDUCTION FOR CERTAIN DOMESTIC PRODUCTION.

    (a) In General.--Section 199 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Enhanced Manufacturing Deduction.--
            ``(1) In general.--If an eligible taxpayer has qualified 
        core manufacturing income for any taxable year, the amount 
        otherwise allowable as a deduction under subsection (a) shall 
        be increased by the applicable percentage of the least of--
                    ``(A) the qualified core manufacturing income of 
                the taxpayer for the taxable year,
                    ``(B) the qualified production activities income of 
                the taxpayer for the taxable year, or
                    ``(C) taxable income (determined without regard to 
                this section).
            ``(2) Eligible taxpayer.--For purposes of this subsection, 
        the term `eligible taxpayer' means, with respect to any taxable 
        year, any taxpayer if the domestic input percentage for such 
        taxable year is more than 75 percent.
            ``(3) Domestic input percentage.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `domestic input 
                percentage' means the ratio (expressed as a percentage) 
                of--
                            ``(i) domestically produced input costs, to
                            ``(ii) the total costs of direct material 
                        inputs included in the cost of goods sold which 
                        are allocable to gross receipts derived from 
                        qualified property.
                    ``(B) Domestically produced input costs.--For 
                purposes of subparagraph (A)--
                            ``(i) In general.--The term `domestically 
                        produced input costs' means the costs described 
                        in subparagraph (A)(ii) for materials--
                                    ``(I) which become an integral part 
                                of property produced by the eligible 
                                taxpayer, or
                                    ``(II) which can be identified or 
                                associated with particular units or 
                                groups of units of property produced by 
                                the eligible taxpayer,
                        if all or virtually all of such material is 
                        produced in the United States.
                            ``(ii) Determination.--For purposes of this 
                        subparagraph--
                                    ``(I) the determination of whether 
                                all or virtually all of a material is 
                                produced in the United States shall be 
                                made based on rules similar to the 
                                guidelines of the Federal Trade 
                                Commission with respect to goods 
                                advertised as Made in USA, and
                                    ``(II) all or virtually all of a 
                                material shall not be treated as 
                                produced in the United States unless 
                                the taxpayer has a reasonable basis to 
                                support such claim.
                            ``(iii) United states.--For purposes of 
                        this subparagraph, the United States includes 
                        any possession of the United States.
            ``(4) Qualified core manufacturing income; qualified 
        property.--For purposes of this subsection--
                    ``(A) In general.--The term `qualified core 
                manufacturing income' means for any taxable year the 
                qualified production activities income which is 
                attributable to the manufacture of qualified property 
                during such taxable year.
                    ``(B) Qualified property.--The term `qualified 
                property' means tangible personal property other than--
                            ``(i) a film,
                            ``(ii) computer software,
                            ``(iii) property described in section 
                        168(f)(4),
                            ``(iv) a natural resource extracted by the 
                        taxpayer, or
                            ``(v) property produced in a farming 
                        business (within the meaning of section 
                        263A(e)(4)).
            ``(5) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is the percentage which bears 
        the same ratio to 9 percent as--
                    ``(A) so much the domestic input percentage as 
                exceeds 75 percent, bears to
                    ``(B) 25 percent.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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