Rhode Island Aims to Level Playing Field for Products Made in the USAApril 4th, 2013 | Category: Industry News, Uncategorized
Legislation introduced recently by U.S. Senator Sheldon Whitehouse (D-R.I.) and U.S. Representative David Cicilline (D-R.I.), the Offshoring Prevention Act, aims to eliminate a special tax break received by companies that ship jobs overseas.
According to the seven-page bill, its purpose is “To amend the Internal Revenue Code of 1986 to provide for the taxation of income of controlled foreign corporations attributable to imported property.”
The bill states, “The term ‘imported property’ includes any property imported into the United States by an unrelated person if, when such property was sold to the unrelated person by the controlled foreign corporation (or a related person), it was reasonable to expect that: such property would be imported into the United States; or such property would be used as a component in other property which would be imported into the United States.”
“I have heard from too many Rhode Island small businesses that are fed up with unfair competition from abroad,” says Whitehouse, who first introduced the Offshoring Prevention Act in 2011. “By giving special tax deals to companies that ship jobs overseas, we put local small businesses at a disadvantage. Ending this costly tax giveaway will help keep jobs in America and generate nearly $20 billion in new revenue – a true win-win.”
“As we work to get our economy back on the right track, it is critical that we level the playing field so American small-business owners can compete successfully in the global marketplace,” said Cicilline. “There is no reason that our tax policies should actually reward companies for shipping jobs overseas and I am looking forward to working with Sen. Whitehouse to pass the Offshoring Prevention Act.”
U.S. companies that manufacture products abroad to be sold here in America currently are allowed to defer payment of federal income tax. The Offshoring Prevention Act would aim to remove offshoring incentives.
The Joint Committee on Taxation estimates the legislation could generate $19.5 billion in new revenue over ten years.