An integrated component counts only with 65 percent domestic materials
What the document says“Subparagraph (A) shall only apply with respect to a secondary component for which not less than 65 percent of the total direct material costs which are paid or incurred”
The section rewrites paragraph (4) of section 45X(d) of the Internal Revenue Code of 1986 so that a person counts as having sold an eligible component to an unrelated person where the primary component is built into a secondary component made in the same facility and that secondary component is sold to an unrelated person, but only where at least 65 percent of the total direct material costs of the secondary component are attributable to primary components mined, produced or manufactured in the United States.
What the document actually says“Subparagraph (A) shall only apply with respect to a secondary component for which not less than 65 percent of the total direct material costs which are paid or incurred”
The rule applies only where a test is met. At least 65 percent of the direct material cost must qualify.
That cost must trace to parts made in the United States. Both parts must be made in the same plant. The finished part must go to an outside buyer.
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