Text: H.R.6109 — 112th Congress (2011-2012)All Bill Information (Except Text)

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Introduced in House (07/12/2012)


112th CONGRESS
2d Session
H. R. 6109

To amend the Internal Revenue Code of 1986 to extend the research and development tax credit, to limit treaty benefits with respect to certain deductible related-party payments, and to treat general aviation aircraft as 7-year property.


IN THE HOUSE OF REPRESENTATIVES
July 12, 2012

Mr. Levin (for himself, Mr. Rangel, Mr. McDermott, Mr. Lewis of Georgia, Mr. Neal, Mr. Becerra, Mr. Blumenauer, Mr. Kind, Mr. Pascrell, Mr. Crowley, and Ms. Berkley) 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 extend the research and development tax credit, to limit treaty benefits with respect to certain deductible related-party payments, and to treat general aviation aircraft as 7-year 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 “Investing in American Innovation Act of 2012”.

SEC. 2. Extension of research and development tax credit.

(a) In general.—Subparagraph (B) of section 41(h)(1) of the Internal Revenue Code of 1986 is amended by striking “December 31, 2011” and inserting “December 31, 2012”.

(b) Conforming amendment.—Subparagraph (D) of section 45C(b)(1) of such Code is amended by striking “December 31, 2011” and inserting “December 31, 2012”.

(c) Effective date.—The amendments made by this section shall apply to amounts paid or incurred after December 31, 2011.

SEC. 3. Limitation on treaty benefits for certain deductible payments.

(a) In general.—Section 894 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(d) Limitation on treaty benefits for certain deductible payments.—

“(1) IN GENERAL.—In the case of any deductible related-party payment, any withholding tax imposed under chapter 3 (and any tax imposed under subpart A or B of this part) with respect to such payment may not be reduced under any treaty of the United States unless any such withholding tax would be reduced under a treaty of the United States if such payment were made directly to the foreign parent corporation.

“(2) DEDUCTIBLE RELATED-PARTY PAYMENT.—For purposes of this subsection, the term ‘deductible related-party payment’ means any payment made, directly or indirectly, by any person to any other person if the payment is allowable as a deduction under this chapter and both persons are members of the same foreign controlled group of entities.

“(3) FOREIGN CONTROLLED GROUP OF ENTITIES.—For purposes of this subsection—

“(A) IN GENERAL.—The term ‘foreign controlled group of entities’ means a controlled group of entities the common parent of which is a foreign corporation.

“(B) CONTROLLED GROUP OF ENTITIES.—The term ‘controlled group of entities’ means a controlled group of corporations as defined in section 1563(a)(1), except that—

“(i) ‘more than 50 percent’ shall be substituted for ‘at least 80 percent’ each place it appears therein, and

“(ii) the determination shall be made without regard to subsections (a)(4) and (b)(2) of section 1563.

A partnership or any other entity (other than a corporation) shall be treated as a member of a controlled group of entities if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).

“(4) FOREIGN PARENT CORPORATION.—For purposes of this subsection, the term ‘foreign parent corporation’ means, with respect to any deductible related-party payment, the common parent of the foreign controlled group of entities referred to in paragraph (3)(A).

“(5) REGULATIONS.—The Secretary may prescribe such regulations or other guidance as are necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance which provide for—

“(A) the treatment of two or more persons as members of a foreign controlled group of entities if such persons would be the common parent of such group if treated as one corporation, and

“(B) the treatment of any member of a foreign controlled group of entities as the common parent of such group if such treatment is appropriate taking into account the economic relationships among such entities.”.

(b) Effective date.—The amendment made by this section shall apply to payments made after the date of the enactment of this Act.

SEC. 4. General aviation aircraft treated as 7-year property.

(a) In general.—Subparagraph (C) of section 168(e)(3) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (iv), by redesignating clause (v) as clause (vi), and by inserting after clause (iv) the following new clause:

“(v) any general aviation aircraft, and”.

(b) Class life.—Paragraph (3) of section 168(g) of such Code is amended by inserting after subparagraph (E) the following new subparagraph:

“(F) GENERAL AVIATION AIRCRAFT.—In the case of any general aviation aircraft, the recovery period used for purposes of paragraph (2) shall be 12 years.”.

(c) General aviation aircraft.—Subsection (i) of section 168 such Code is amended by inserting after paragraph (19) the following new paragraph:

“(20) GENERAL AVIATION AIRCRAFT.—The term ‘general aviation aircraft’ means any airplane or helicopter (including airframes and engines) not used in commercial or contract carrying of passengers or freight, but which primarily engages in the carrying of passengers.”.

(d) Effective date.—This section shall be effective for property placed in service after December 31, 2012.