Bill Details
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AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would keep in place a tax break for certain income that U.S. companies earn from selling products, services, or licenses tied to ideas and inventions used outside the United States. Under current law, that deduction was scheduled to go down in the future. This bill would stop that planned reduction and keep the deduction at its current level. The change would take effect as soon as the bill becomes law.
- It changes a section of the federal tax code that deals with foreign-derived intangible income, which is income from sales to customers outside the United States that is linked to intellectual property or other intangible assets.
- The bill prevents the deduction from being reduced on the scheduled date, helping keep the tax benefit the same instead of lowering it.
- The new rule would begin on the day the bill is enacted.
Official Summaries
Growing and Preserving Innovation in America Act of 2025
This bill makes permanent the increased percentage rates at which a domestic corporation may deduct (for federal tax purposes) foreign-derived intangible income and global intangible low-taxed income (GILTI).
As background, for tax years beginning after 2017 and before 2026, a domestic corporation generally is allowed a tax deduction equal to the sum of (1) 37.5% of the corporation’s foreign-derived intangible income, and (2) 50% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI. However, under current law, the tax deduction decreases starting in 2026, to the sum of (1) 21.875% of the corporation’s foreign-derived intangible income, and (2) 37.5% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI.
Under the bill, for tax years beginning in 2026, a domestic corporation generally may claim a tax deduction equal to the sum of (1) 37.5% of the corporation’s foreign-derived intangible income, and (2) 50% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1062 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1062
To amend the Internal Revenue Code of 1986 to repeal the scheduled
reduction in the deduction for foreign-derived intangible income.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 6, 2025
Mr. Feenstra (for himself and Mr. Morelle) 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 repeal the scheduled
reduction in the deduction for foreign-derived intangible income.
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 ``Growing and Preserving Innovation in
America Act of 2025''.
SEC. 2. REPEAL OF SCHEDULED REDUCTION IN THE DEDUCTION FOR FOREIGN-
DERIVED INTANGIBLE INCOME.
(a) In General.--Section 250(a)(3) of the Internal Revenue Code of
1986 is amended by striking ``paragraph (1)'' and all that follows and
inserting ``paragraph (1)(B) shall be applied by substituting `37.5
percent' for `50 percent'.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
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