Title: Offshoring Prevention Act
Policy area: Taxation

Summary:
Offshoring Prevention Act
This bill amends the Internal Revenue Code to include imported property income in foreign base company income, for purposes of determining the income of controlled foreign corporations.
The bill defines "imported property income" as, with certain exceptions, income derived in connection with:
The bill also provides for a separate application of limitations on the foreign tax credit for imported property income.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2005 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 2005

To amend the Internal Revenue Code of 1986 to provide for the taxation 
 of income of controlled foreign corporations attributable to imported 
                               property.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 6, 2017

Mr. Cicilline 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 provide for the taxation 
 of income of controlled foreign corporations attributable to imported 
                               property.

    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 ``Offshoring Prevention Act''.

SEC. 2. TAXATION OF INCOME OF CONTROLLED FOREIGN CORPORATIONS 
              ATTRIBUTABLE TO IMPORTED PROPERTY.

    (a) In General.--Section 954(a) of the Internal Revenue Code of 
1986 is amended by striking the period at the end of paragraph (5) and 
inserting ``, and'', by redesignating paragraph (5) as paragraph (4), 
and by adding at the end the following new paragraph:
            ``(5) imported property income for the taxable year 
        (determined under subsection (j) and reduced as provided in 
        subsection (b)(5)).''.
    (b) Imported Property Income Defined.--Section 954 of such Code is 
amended by adding at the end the following new subsection:
    ``(j) Imported Property Income.--
            ``(1) In general.--For purposes of subsection (a)(5), the 
        term `imported property income' means income (whether in the 
        form of profits, commissions, fees, or otherwise) derived in 
        connection with--
                    ``(A) manufacturing, producing, growing, or 
                extracting imported property;
                    ``(B) the sale, exchange, or other disposition of 
                imported property; or
                    ``(C) the lease, rental, or licensing of imported 
                property.
        Such term shall not include any foreign oil and gas extraction 
        income (within the meaning of section 907(c)) or any foreign 
        oil related income (within the meaning of section 907(c)).
            ``(2) Imported property.--For purposes of this subsection--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `imported property' means 
                property which is imported into the United States by 
                the controlled foreign corporation or a related person.
                    ``(B) Imported property includes certain property 
                imported by unrelated persons.--The term `imported 
                property' includes any property imported into the 
                United States by an unrelated person if, when such 
                property was sold to the unrelated person by the 
                controlled foreign corporation (or a related person), 
                it was reasonable to expect that--
                            ``(i) such property would be imported into 
                        the United States; or
                            ``(ii) such property would be used as a 
                        component in other property which would be 
                        imported into the United States.
                    ``(C) Exception for property subsequently 
                exported.--The term `imported property' does not 
                include any property which is imported into the United 
                States and which--
                            ``(i) before substantial use in the United 
                        States, is sold, leased, or rented by the 
                        controlled foreign corporation or a related 
                        person for direct use, consumption, or 
                        disposition outside the United States; or
                            ``(ii) is used by the controlled foreign 
                        corporation or a related person as a component 
                        in other property which is so sold, leased, or 
                        rented.
                    ``(D) Exception for certain agricultural 
                commodities.--The term `imported property' does not 
                include any agricultural commodity which is not grown 
                in the United States in commercially marketable 
                quantities.
            ``(3) Definitions and special rules.--
                    ``(A) Import.--For purposes of this subsection, the 
                term `import' means entering, or withdrawal from 
                warehouse, for consumption or use. Such term includes 
                any grant of the right to use intangible property (as 
                defined in section 936(h)(3)(B)) in the United States.
                    ``(B) United states.--For purposes of this 
                subsection, the term `United States' includes the 
                Commonwealth of Puerto Rico, the Virgin Islands of the 
                United States, Guam, American Samoa, and the 
                Commonwealth of the Northern Mariana Islands.
                    ``(C) Unrelated person.--For purposes of this 
                subsection, the term `unrelated person' means any 
                person who is not a related person with respect to the 
                controlled foreign corporation.
                    ``(D) Coordination with foreign base company sales 
                income.--For purposes of this section, the term 
                `foreign base company sales income' shall not include 
                any imported property income.''.
    (c) Separate Application of Limitations on Foreign Tax Credit for 
Imported Property Income.--
            (1) In general.--Section 904(d)(1) of such Code is amended 
        by striking ``and'' at the end of subparagraph (A), by 
        redesignating subparagraph (B) as subparagraph (C), and by 
        inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) imported property income, and''.
            (2) Imported property income defined.--Section 904(d)(2) of 
        such Code is amended by redesignating subparagraphs (I), (J), 
        and (K) as subparagraphs (J), (K), and (L), respectively, and 
        by inserting after subparagraph (H) the following new 
        subparagraph:
                    ``(I) Imported property income.--The term `imported 
                property income' means any income received or accrued 
                by any person which is of a kind which would be 
                imported property income (as defined in section 
                954(j)).''.
            (3) Conforming amendment.--Section 904(d)(2)(A)(ii) of such 
        Code is amended by inserting ``or imported property income'' 
        after ``passive category income''.
    (d) Conforming Amendments.--
            (1) Section 952(c)(1)(B)(iii) of such Code is amended--
                    (A) by redesignating subclauses (II), (III), (IV), 
                and (V) as subclauses (III), (IV), (V), and (VI), and
                    (B) by inserting after subclause (I) the following 
                new subclause:
                                    ``(II) imported property income,''.
            (2) The last sentence of section 954(b)(4) of such Code is 
        amended by striking ``subsection (a)(5)'' and inserting 
        ``subsection (a)(4)''.
            (3) Section 954(b)(5) of such Code is amended by striking 
        ``and the foreign base company oil related income'' and 
        inserting ``the foreign base company oil related income, and 
        the imported property income''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after the date 
of the enactment of this Act, and to taxable years of United States 
shareholders within which or with which such taxable years of such 
foreign corporations end.
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