II 109th CONGRESS 1st Session S. 1816 IN THE SENATE OF THE UNITED STATES October 4, 2005 Mr. Santorum 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 allow the manufacturing deduction provided by the American Jobs Creation Act of 2004 with respect to income attributable to domestic production activities in Puerto Rico.

1.

Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico

(a)

In general

Subsection (d) of section 199 of the Internal Revenue Code of 1986 (relating to definitions and special rules) is amended by redesignating paragraph (7) as paragraph (8) and by inserting after paragraph (6) the following new paragraph: (7)

Treatment of activities in puerto rico

In the case of any taxpayer with gross receipts for any taxable year from sources within the Commonwealth of Puerto Rico, if all of such receipts are taxable under section 1 or 11 for such taxable year, then for purposes of determining the domestic production gross receipts of such taxpayer for such taxable year under subsection (c)(4), the term United States shall include the Commonwealth of Puerto Rico. . (b)

Effective date

The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2005.