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Full Text of this Amendment
At the end of title VI, insert the following:
SEC. --. REPEAL OF QUALIFIED SHIPPING INVESTMENT WITHDRAWAL RULES.
(a) In General.--Section 955 is hereby repealed.
(b) Conforming Amendments.--
(1) Section 951(a)(1)(A) is amended by adding "and" at the end of clause (i) and by striking clause (iii).
(2) Section 951(a)(1)(A)(ii) is amended by striking ", and" at the end and inserting ", except that in applying this clause amounts invested in less developed country corporations described in section 955(c)(2) (as so in effect) shall not be treated as investments in less developed countries.".
(3) Section 951(a)(3) is hereby repealed.
(4) Section 964(b) of such Code is amended by striking ", 955,".
(5) The table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking the item relating to section 955.
(c) Effective Date.--The amendments made by this section shall apply to taxable years of controlled foreign corporations ending on or after the date of the enactment of this Act, and to taxable years of United States shareholders in which or with which such taxable years of controlled foreign corporations end.
SEC. --. TAX IMPOSED ON ELECTING UNITED STATES SHAREHOLDERS.
(a) In General.--In the case of a United States shareholder for which an election is in effect under this section, a tax is hereby imposed on such shareholder's pro rata share (determined under the principles of paragraph (2) of subsection (a) of section 951 of the Internal Revenue Code of 1986) of the sum of--
(1) the foreign base company shipping income (determined under section 954(f) of the Internal Revenue Code of 1986 as in effect before the enactment of the American Jobs Creation Act of 2004) for all prior taxable years beginning after 1975 and before 1987, and
(2) income described in section 954(b)(2) of the Internal Revenue Code as in effect prior to the effective date of the Tax Reform Act of 1975, without regard to whether such income was not included in subpart F income under section 954(b)(2) or any other provision of such Code,
but only to the extent such income has not previously been included in the gross income of a United States person as a dividend or under any section of the Internal Revenue Code after 1962, or excluded from gross income pursuant to subsection (a) of section 959 of the Internal Revenue Code of 1986.
(b) Amount of Tax.--The amount of tax imposed by subsection (a) shall be 5.25 percent of the income described therein.
(c) Income Not Subject to Further Tax.--The income on which a tax is imposed by subsection (a) shall not (other than such tax) be included in the gross income of such United States shareholder (or any other United States person who acquires from any person any portion of the interest of such United States shareholder in such foreign corporation) and shall be treated for purposes of the Internal Revenue Code of 1986 as if such amounts are, or have been, included in the income of the
United States shareholder under section 951(a)(1)(B).
(d) Additional Tax Imposed for Failure to Maintain Employment Levels.--
(1) IN GENERAL.--If, during the period consisting of the calendar month in which the election under this section is made and the succeeding 23 calendar months, the taxpayer does not maintain an average employment level at least equal to the taxpayer's prior average employment, an additional amount shall be taken into account as income by the taxpayer during the taxable year that includes the final day of such period, equal to $25,000 multiplied by the number of employees by which the
taxpayer's average employment level during such period falls below the prior average employment.
(2) PRIOR AVERAGE EMPLOYMENT.--For purposes of this subsection, the taxpayer's prior average employment is the average number of full time equivalent employees of the taxpayer during the period consisting of the 24 calendar months immediately preceding the calendar month in which the election under this section is made.
(3) AGGREGATION RULES.--In determining the taxpayer's average employment level and prior average employment, all domestic members of a controlled group (as defined in section 264(e)(5)(B) of the Internal Revenue Code of 1986) shall be treated as a single taxpayer.
(1) IN GENERAL.--A taxpayer may elect to apply this section to--
(A) the taxpayer's last taxable year which begins before the date of the enactment of this Act, or
(B) the taxpayer's first taxable year beginning on or after such date.
(2) TIMING OF ELECTION AND ONE-TIME ELECTION.--Such election may be made only once by any taxpayer, and only if made on or before the due date (including extensions) for filing the return of tax for the taxable year of such election.
(f) Effective Date.--This section shall apply to taxable years ending on or after the date of the enactment of this Act.
(As printed in the Congressional Record for the Senate on Mar 8, 2010.)