Text: H.R.5473 — 111th Congress (2009-2010)All Bill Information (Except Text)

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Introduced in House (05/28/2010)


111th CONGRESS
2d Session
H. R. 5473

To amend the Internal Revenue Code of 1986 to exclude from personal holding company income dividends which are received from foreign affiliates and which are reinvested in the United States.


IN THE HOUSE OF REPRESENTATIVES
May 28, 2010

Ms. Linda T. Sánchez of California 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 exclude from personal holding company income dividends which are received from foreign affiliates and which are reinvested 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 “Investing Income at Home Act of 2010”.

SEC. 2. Exclusion from personal holding company income of dividends which are received from foreign affiliates and which are reinvested in the United States.

(a) In general.—Paragraph (1) of section 543(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting “, and”, and by adding at the end the following new subparagraph:

“(E) foreign affiliate dividends designated for reinvestment in the United States (within the meaning of subsection (b)(5)).”.

(b) Foreign affiliate dividends designated for reinvestment.—Subsection (b) of section 543 of such Code is amended by adding at the end the following new paragraph:

“(5) FOREIGN AFFILIATE DIVIDENDS DESIGNATED FOR REINVESTMENT.—For purposes of subsection (a)(1)(E)—

“(A) IN GENERAL.—A dividend is described in subsection (a)(1)(E) if—

“(i) the dividend is received by the taxpayer from an affiliated foreign corporation, and

“(ii) the taxpayer designates (on the taxpayer’s return for the taxable year in which received) the dividend for reinvestment in the United States (as described in section 965(b)(4)(B)), including as a source for funding compensation and benefits for both existing and newly hired workers (other than for executives), by the taxpayer or 1 or more members of an affiliated group which includes the taxpayer.

“(B) AFFILIATED FOREIGN CORPORATION.—For purposes of subparagraph (A), the term ‘affiliated foreign corporation’ means any foreign corporation if stock possessing at least 10 percent of the total combined voting power of all outstanding classes of stock entitled to vote is owned in the aggregate by the taxpayer and members of the an affiliated group which includes the taxpayer.

“(C) FAILURE TO REINVEST WITHIN 5 YEARS.—If, at the end of the 5th taxable year following the taxable year in which the dividend is received, the dividend is not reinvested in the United States as described in subparagraph (A)(ii), the taxpayer shall pay a tax equal to the sum of—

“(i) the product of—

“(I) the amount of the dividend not so reinvested, and

“(II) the rate of tax in effect under section 541 on the date that the dividend was received, and

“(ii) the amount of interest that would be assessed under section 6601 if the amount of tax determined under clause (i) were treated as an underpayment for the taxable year in which the dividend was received.

“(D) AFFILIATED GROUP.—For purposes of this paragraph, the term ‘affiliated group’ has the meaning given to such term by section 1504(a).”.

(c) Effective date.—The amendments made by this section shall apply to dividends received in taxable years beginning on or after the date of the enactment of this Act.