Sourcing Certain Income from the Sale of Inventory Produced in the United States
Section 70313 · Sec. 70313 ·
What this chapter is about
This part lets part of the profit on goods made here count as foreign income. The goods must be sold abroad through a foreign office. No more than half the profit may be counted that way. The change starts with tax years after December 31, 2025.
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70313 in the PDF
What the document says
“shall be treated as from sources without the United States, except that the amount so treated shall not exceed 50 percent of the income from the sale or exchange of such inventory property.”
The section adds a new paragraph (6) to section 904(b) of the Internal Revenue Code of 1986. Where a United States person keeps an office or other fixed place of business in a foreign country, income from selling inventory property outside the United States that was produced in the United States, is for use outside the United States and falls under the third sentence of section 863(b), and that is attributable to that office, is treated as foreign source income, up to 50 percent of the income from that sale.
What the document actually says
“shall be treated as from sources without the United States, except that the amount so treated shall not exceed 50 percent of the income from the sale or exchange of such inventory property.”
That sentence, in plain words
The income counts as coming from outside the United States. No more than half of it may be counted that way.
What this is about
The goods must be made here and sold abroad. They must be for use abroad. The sale must run through a foreign office of the firm.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70313 in the PDF
What the document says
“The amendment made by this section shall apply to taxable years beginning after December 31, 2025.”
The section applies its amendment to taxable years beginning after December 31, 2025.
What the document actually says
“The amendment made by this section shall apply to taxable years beginning after December 31, 2025.”
That sentence, in plain words
The change starts with tax years that begin after December 31, 2025.
What this is about
Earlier tax years are not touched. The old rule still holds for them. The date is fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Both things the section does: the new source rule with its 50 percent ceiling, and the effective date.
Nothing in the section is left out. It has two subsections and each is recorded.
The section works by amending section 904(b) of the Internal Revenue Code of 1986 and points to sections 863, 864 and 865 of that Code, none of which is indexed here.
