110 HR 1916 IH: To amend the Internal Revenue Code of 1986 to expand, and U.S. House of Representatives 2007-04-18 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 1st Session H. R. 1916 IN THE HOUSE OF REPRESENTATIVES April 18, 2007 Mr. Faleomavaega 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 expand, and extend for 10 years, the American Samoa economic development credit.

1.

Expansion and extension of American Samoa economic development credit

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

30D.

American Samoa economic development credit

(a)

Allowance of credit

In the case of a qualified domestic corporation, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to the portion of the tax which is attributable to the taxable income, from sources without the United States, from— (1)the active conduct of a trade or business within American Samoa, or (2)the sale or exchange of substantially all of the assets used by the taxpayer in the active conduct of such trade or business. (b)

Limitation

The amount of the credit determined under subsection (a) for any taxable year shall not exceed the sum of the following amounts (determined by treating American Samoa as the only possession of the United States): (1)60 percent of the sum of— (A)the aggregate amount of the qualified domestic corporation's qualified possession wages for such taxable year, plus (B)the allocable employee fringe benefit expenses of the qualified domestic corporation for such taxable year. (2)The sum of— (A)15 percent of the depreciation allowances for the taxable year with respect to short-life qualified tangible property, (B)40 percent of the depreciation allowances for the taxable year with respect to medium-life qualified tangible property, and (C)65 percent of the depreciation allowances for the taxable year with respect to long-life qualified tangible property. (c)

Qualified domestic corporation

For purposes of this section, the term qualified domestic corporation means any domestic corporation which meets the conditions of both paragraphs (1) and (2) of section 30A(b). (d)

Credit not allowed against certain taxes

The credit provided by subsection (a) shall not be allowed against any tax referred to in a paragraph of section 30A(c). (e)

Treatment of certain foreign taxes

For purposes of this title, any tax of a foreign country or a possession of the United States which is paid or accrued with respect to taxable income which is taken into account in computing the credit under subsection (a) shall not be treated as income, war profits, or excess profits taxes paid or accrued to a foreign country or possession of the United States, and no deduction shall be allowed under this title with respect to any amounts so paid or accrued. (f)

Administrative provisions

For purposes of this title— (1)the credit under this section shall be treated in the same manner as the credit under section 936, and (2)a corporation to which this section applies shall be treated in the same manner as if it were a corporation electing the application of section 936. (g)

Denial of double benefit

Any wages or other expenses taken into account in determining the credit under this section may not be taken into account in determining the credit under section 41. (h)

Application of section

This section shall apply to taxable years beginning after December 31, 2007, and before January 1, 2018.

. (b)

Conforming amendments

(1)Paragraph (1) of section 55(c) of such Code is amended by striking and the Puerto Rico economic activity credit under section 30A and inserting the Puerto Rico economic activity credit under section 30A, and the American Samoa economic development credit under section 30D. (2)Subclause (I) of section 56(g)(4)(C)(ii) of such Code is amended by inserting 30D, after 30A,. (3)Subclause (VI) of section 56(g)(4)(C)(iii) of such Code is amended to read as follows: (VI)

Application to sections 30A and 30D corporations

References in this clause to section 936 shall be treated as including references to sections 30A and 30D. . (4)Subsection (b) of section 59 of such Code is amended by inserting , 30D, after 30A each place it appears, including the heading. (5)The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 30D. American Samoa economic development credit.. (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.