2012 US Code
Title 26 - Internal Revenue Code
Subtitle A - Income Taxes (§§ 1 - 1564)
Chapter 1 - NORMAL TAXES AND SURTAXES (§§ 1 - 1400U-3)
Subchapter A - Determination of Tax Liability (§§ 1 - 59B)
Part IV - CREDITS AGAINST TAX (§§ 21 - 54AA)
Subpart B - Other Credits (§§ 27 - 30D)
Section 30A - Puerto Rico economic activity credit
Publication Title | United States Code, 2012 Edition, Title 26 - INTERNAL REVENUE CODE |
Category | Bills and Statutes |
Collection | United States Code |
SuDoc Class Number | Y 1.2/5: |
Contained Within | Title 26 - INTERNAL REVENUE CODE Subtitle A - Income Taxes CHAPTER 1 - NORMAL TAXES AND SURTAXES Subchapter A - Determination of Tax Liability PART IV - CREDITS AGAINST TAX Subpart B - Other Credits Sec. 30A - Puerto Rico economic activity credit |
Contains | section 30A |
Date | 2012 |
Laws in Effect as of Date | January 15, 2013 |
Positive Law | No |
Disposition | standard |
Source Credit | Added Pub. L. 104-188, title I, §1601(b)(1), Aug. 20, 1996, 110 Stat. 1830; amended Pub. L. 105-34, title XVI, §1601(f)(1)(A), Aug. 5, 1997, 111 Stat. 1090; Pub. L. 106-554, §1(a)(7) [title III, §311(a)(2)], Dec. 21, 2000, 114 Stat. 2763, 2763A-640. |
Statutes at Large References | 110 Stat. 1830, 1833 111 Stat. 1090 114 Stat. 2763 120 Stat. 2942 122 Stat. 3869 124 Stat. 3322 126 Stat. 2335 |
Public Law References | Public Law 104-188, Public Law 105-34, Public Law 106-170, Public Law 106-554, Public Law 109-432, Public Law 110-343, Public Law 111-312, Public Law 112-240 |
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Except as otherwise provided in this section, if the conditions of both paragraph (1) and paragraph (2) of subsection (b) are satisfied with respect to 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—
(A) the active conduct of a trade or business within Puerto Rico, or
(B) the sale or exchange of substantially all of the assets used by the taxpayer in the active conduct of such trade or business.
In the case of any taxable year beginning after December 31, 2001, the aggregate amount of taxable income taken into account under the preceding sentence (and in applying subsection (d)) shall not exceed the adjusted base period income of such corporation, as determined in the same manner as under section 936(j).
(2) Qualified domestic corporationFor purposes of paragraph (1), the term “qualified domestic corporation” means a domestic corporation—
(A) which is an existing credit claimant with respect to Puerto Rico, and
(B) with respect to which section 936(a)(4)(B) does not apply for the taxable year.
(3) Separate applicationFor purposes of determining—
(A) whether a taxpayer is an existing credit claimant with respect to Puerto Rico, and
(B) the amount of the credit allowed under this section,
this section (and so much of section 936 as relates to this section) shall be applied separately with respect to Puerto Rico.
(b) Conditions which must be satisfiedThe conditions referred to in subsection (a) are—
(1) 3-year periodIf 80 percent or more of the gross income of the qualified domestic corporation for the 3-year period immediately preceding the close of the taxable year (or for such part of such period immediately preceding the close of such taxable year as may be applicable) was derived from sources within a possession (determined without regard to section 904(f)).
(2) Trade or businessIf 75 percent or more of the gross income of the qualified domestic corporation for such period or such part thereof was derived from the active conduct of a trade or business within a possession.
(c) Credit not allowed against certain taxesThe credit provided by subsection (a) shall not be allowed against the tax imposed by—
(1) section 59A (relating to environmental tax),
(2) section 531 (relating to the tax on accumulated earnings),
(3) section 541 (relating to personal holding company tax), or
(4) section 1351 (relating to recoveries of foreign expropriation losses).
(d) Limitations on credit for active business incomeThe amount of the credit determined under subsection (a) for any taxable year shall not exceed the sum of the following amounts:
(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.
(3) If the qualified domestic corporation does not have an election to use the method described in section 936(h)(5)(C)(ii) (relating to profit split) in effect for the taxable year, the amount of the qualified possession income taxes for the taxable year allocable to nonsheltered income.
(e) Administrative provisionsFor purposes of this title—
(1) the provisions of section 936 (including any applicable election thereunder) shall apply in the same manner as if the credit under this section were a credit under section 936(a)(1)(A) for a domestic corporation to which section 936(a)(4)(A) applies,
(2) the credit under this section shall be treated in the same manner as the credit under section 936, and
(3) 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.
(f) Denial of double benefitAny 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.
(g) DefinitionsFor purposes of this section, any term used in this section which is also used in section 936 shall have the same meaning given such term by section 936.
(h) Application of sectionThis section shall apply to taxable years beginning after December 31, 1995, and before January 1, 2006.
(Added Pub. L. 104–188, title I, §1601(b)(1), Aug. 20, 1996, 110 Stat. 1830; amended Pub. L. 105–34, title XVI, §1601(f)(1)(A), Aug. 5, 1997, 111 Stat. 1090; Pub. L. 106–554, §1(a)(7) [title III, §311(a)(2)], Dec. 21, 2000, 114 Stat. 2763, 2763A–640.)
Amendments2000—Subsecs. (f) to (h). Pub. L. 106–554 added subsec. (f) and redesignated former subsecs. (f) and (g) as (g) and (h), respectively.
1997—Pub. L. 105–34 substituted “Puerto Rico” for “Puerto Rican” in section catchline.
Effective Date of 2000 AmendmentPub. L. 106–554, §1(a)(7) [title III, §311(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–640, provided that: “Subsection (c) [not classified to the Code] and the amendments made by this section [amending this section and sections 280C and 857 of this title] shall take effect as if included in the provisions of the Ticket to Work and Work Incentives Improvement Act of 1999 [Pub. L. 106–170, see Tables for classification] to which they relate.”
Effective Date of 1997 AmendmentAmendment by Pub. L. 105–34 effective as if included in the provisions of the Small Business Job Protection Act of 1996, Pub. L. 104–188, to which it relates, see section 1601(j) of Pub. L. 105–34, set out as a note under section 23 of this title.
Effective DatePub. L. 104–188, title I, §1601(c), Aug. 20, 1996, 110 Stat. 1833, provided that:
“(1)
“(2)
“(3)
Pub. L. 109–432, div. A, title I, §119, Dec. 20, 2006, 120 Stat. 2942, as amended by Pub. L. 110–343, div. C, title III, §309(a), Oct. 3, 2008, 122 Stat. 3869; Pub. L. 111–312, title VII, §756(a), Dec. 17, 2010, 124 Stat. 3322; Pub. L. 112–240, title III, §330(a), (b), Jan. 2, 2013, 126 Stat. 2335, provided that:
“(a)
“(1) in the case of a taxable year beginning before January 1, 2012, such corporation—
“(A) is an existing credit claimant with respect to American Samoa, and
“(B) elected the application of section 936 of the Internal Revenue Code of 1986 for its last taxable year beginning before January 1, 2006, and
“(2) in the case of a taxable year beginning after December 31, 2011, such corporation meets the requirements of subsection (e).
“(b)
“(1)
“(2)
“(3)
“(c)
“(d)
“(1) in the case of a corporation that meets the requirements of subparagraphs (A) and (B) of subsection (a)(1), to the first 8 taxable years of such corporation which begin after December 31, 2006, and before January 1, 2014, and
“(2) in the case of a corporation that does not meet the requirements of subparagraphs (A) and (B) of subsection (a)(1), to the first 2 taxable years of such corporation which begin after December 31, 2011, and before January 1, 2014.
“(e)
[Pub. L. 112–240, title III, §330(c), Jan. 2, 2013, 126 Stat. 2335, provided that: “The amendments made by this section [amending section 119 of Pub. L. 109–432, set out above] shall apply to taxable years beginning after December 31, 2011.”]
[Pub. L. 111–312, title VII, §756(b), Dec. 17, 2010, 124 Stat. 3322, provided that: “The amendments made by this section [amending section 119 of Pub. L. 109–432, set out above] shall apply to taxable years beginning after December 31, 2009.”]
[Pub. L. 110–343, div. C, title III, §309(b), Oct. 3, 2008, 122 Stat. 3869, provided that: “The amendments made by this section [amending section 119 of Pub. L. 109–432, set out above] shall apply to taxable years beginning after December 31, 2007.”]
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