The date of the enactment of the Tax Reform Act of 1986, referred to in subsecs. (d)(3)(B) and (i)(4)(B)(v), is the date of enactment of Pub. L. 99–514, which was approved Oct. 22, 1986.

The Caribbean Basin Economic Recovery Act, referred to in subsec. (d)(4)(A)(i), (B), is title II of Pub. L. 98–67, Aug. 5, 1983, 97 Stat. 384, which is classified principally to chapter 15 (§ 2701 et seq.) of Title 19, Customs Duties. Section 212 of that Act is classified to section 2702 of Title 19. For complete classification of this Act to the Code, see Short Title note set out under section 2701 of Title 19 and Tables.

The date of the enactment of this subparagraph, referred to in subsec. (h)(3)(A), means the date of enactment of Pub. L. 97–248, which was approved Sept. 3, 1982.

The date of the enactment of this clause, referred to in subsec. (h)(5)(B)(iii)(I), (iv), means the date of enactment of Pub. L. 97–248, which was approved Sept. 3, 1982.

Section 230 of the Social Security Act, referred to in subsec. (i)(1)(B)(i), is classified to section 430 of Title 42, The Public Health and Welfare.

2007—Subsec. (f)(2)(B). Pub. L. 110–172 struck out “FSC or” before “former FSC”.

2004—Subsec. (a)(2)(A). Pub. L. 108–357 substituted “subsections (f) and (g) of section 904” for “section 904 (f)”.

1996—Subsec. (a)(4)(A)(ii)(I). Pub. L. 104–188, § 1704(t)(80), which directed that subcl. (I) be amended by substituting “depreciation” for “deprecation”, could not be executed, because the word “deprecation” did not appear in text.

Subsec. (b). Pub. L. 104–188, § 1704(t)(37), substituted “subparagraphs (D)(ii)” for “subparagraphs (D)(ii)(I)”.

Subsec. (j). Pub. L. 104–188, § 1601(a), added subsec. (j).

1993—Subsec. (a)(1). Pub. L. 103–66, § 13227(a)(1), substituted “Except as otherwise provided in this section” for “Except as provided in paragraph (3)”.

Subsec. (a)(4). Pub. L. 103–66, § 13227(a)(2), added par. (4).

Subsec. (i). Pub. L. 103–66, § 13227(b), added subsec. (i).

1990—Subsec. (d)(4)(D). Pub. L. 101–382 added subpar. (D).

Subsec. (e)(1). Pub. L. 101–508 substituted “subsection (a)(2)” for “subsection (a)(1)” wherever appearing.

1988—Subsec. (d)(3)(B). Pub. L. 100–647, § 1012(j), inserted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” after “section 957 (c)”.

Subsec. (d)(4)(A)(ii). Pub. L. 100–647, § 1012(n)(5)(A), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “in accordance with a specific authorization granted by the Government Development Bank for Puerto Rico pursuant to regulations issued by the Secretary of the Treasury of Puerto Rico.”

Subsec. (d)(4)(B). Pub. L. 100–647, § 6132(a), inserted “and the Virgin Islands” after “274(h)(6)(A)”.

Subsec. (d)(4)(C)(i), (ii). Pub. L. 100–647, § 1012(n)(5)(B), substituted “Commissioner of Financial Institutions of Puerto Rico” for “Secretary of the Treasury of Puerto Rico”.

Subsec. (h)(5)(C)(i)(I). Pub. L. 100–647, § 1012(n)(4), amended directory language of Pub. L. 99–514, § 1231(a)(1), see 1986 Amendment note below.

Subsec. (h)(5)(C)(i)(IV)(c). Pub. L. 100–647, § 1002(h)(3), substituted “section 41” and “section 41 (f)” for “section 30” and “section 30 (f)”, respectively.

Subsec. (h)(7), (8). Pub. L. 100–647, § 1012(h)(2)(B), added par. (7) and redesignated former par. (7) as (8).

1986—Subsec. (a)(2)(B). Pub. L. 99–514, § 1231(d)(1), substituted “75 percent” for “65 percent”.

Subsec. (a)(2)(C). Pub. L. 99–514, § 1231(d)(2), struck out subpar. (C), transitional rule, which read as follows: “In applying subparagraph (B) with respect to taxable years beginning after December 31, 1982, and before January 1, 1985, the following percentage shall be substituted for ‘65 percent’:

Subsec. (a)(3). Pub. L. 99–499 in par. (3), as amended by Pub. L. 99–514, added subpar. (A) and redesignated former subpars. (A) to (C) as (B) to (D), respectively.

Pub. L. 99–514, § 701(e)(4)(I), struck out subpar. (A) which read “section 56 (relating to corporate minimum tax),”, and redesignated subpars. (B), (C), and (E) as (A), (B), and (C), respectively.

Subsec. (b). Pub. L. 99–514, § 1231(b), inserted at end “This subsection shall not apply to any amount described in subsection (a)(1)(A)(i) received from a person who is not a related person (within the meaning of subsection (h)(3) but without regard to subparagraphs (D)(ii)(I) and (E)(i) thereof) with respect to the domestic corporation.”

Subsec. (d)(1). Pub. L. 99–514, § 1275(a)(1), substituted “and the Virgin Islands” for “, but does not include the Virgin Islands of the United States”.

Subsec. (d)(4). Pub. L. 99–514, § 1231(c), added par. (4).

Subsec. (h)(3)(D)(ii). Pub. L. 99–514, § 1812(c)(4)(C), amended cl. (ii) generally. Prior to amendment, cl. (ii), special rules, read as follows: “For purposes of clause (i)—

“(I) section 267 (b) and section 707 (b)(1) shall be applied by substituting ‘10 percent’ for ‘50 percent’, and

“(II) section 267 (b)(3) shall be applied without regard to whether a person was a personal holding company or a foreign personal holding company.”

Subsec. (h)(5)(C)(i)(I). Pub. L. 99–514, § 1231(a)(1), as amended by Pub. L. 100–647, § 1012(n)(4), in introductory provisions, substituted “the same proportion of 110 percent of the cost” for “the same proportion of the cost”, and inserted at end of material relating to payment of cost sharing “In the case of intangible property described in subsection (h)(3)(B)(i) which the electing corporation is treated as owning under subclause (II), in no event shall the payment required under this subclause be less than the inclusion or payment which would be required under section 367 (d)(2)(A)(ii) or section 482 if the electing corporation were a foreign corporation.”

Subsec. (h)(5)(C)(i)(I)(a). Pub. L. 99–514, § 231(d)(3)(G), substituted “section 41 (b)” for “section 30 (b)”.

Subsec. (h)(5)(C)(ii)(II). Pub. L. 99–514, § 1231(f), substituted “all products and types of services, within such product area, produced or rendered” for “all products produced and types of service rendered”.

Pub. L. 99–514, § 1231(a)(2), substituted “the third and fourth sentences thereof, but substituting ‘120 percent’ for ‘110 percent’ in the second sentence thereof)” for “the third sentence thereof)”.

1984—Subsec. (a)(2)(C). Pub. L. 98–369, § 712(g), substituted in table heading “The percentage is” for “The percentage tax is”.

Subsec. (f). Pub. L. 98–369, § 801(d)(11), amended subsec. (f) generally, substituting in heading “Limitation on credit for DISC’s and FSC’s” for “DISC or former DISC corporation ineligible for credit”, and in text striking out reference to section 992 (a) and inserting provision disallowing a credit to a corporation for a taxable year in which it owns at any time stock in a FSC or former FSC.

Subsec. (h)(5)(C)(i)(I)(a). Pub. L. 98–369, § 474(r)(22)(A), substituted “section 30 (b)” for “section 44F (b)”.

Subsec. (h)(5)(C)(i)(IV)(c). Pub. L. 98–369, § 474(r)(22)(B), substituted “section 30” for “section 44F” and “section 30 (f)” for “section 44F (f)”.

1982—Subsec. (a)(2)(B). Pub. L. 97–248, § 213(a)(1)(A), substituted “65 percent” for “50 percent”.

Subsec. (a)(2)(C). Pub. L. 97–248, § 213(a)(1)(B), added subpar. (C).

Subsec. (a)(3)(A). Pub. L. 97–248, § 201(d)(8)(B), formerly § 201(c)(8)(B), substituted “(relating to corporate minimum tax)” for “(relating to minimum tax)”.

Subsec. (h). Pub. L. 97–248, § 213(a)(2), added subsec. (h).

1978—Subsec. (a). Pub. L. 95–600, § 701(u)(11)(A), reworked provisions of par. (1) into introductory text, substituting reference to par. (3) for reference to par. (2), and subpars. (A) and (B), inserted introductory text of par. (2), redesignated former subpars. (A) and (B) of par. (1) as subpars. (A) and (B) of par. (2), and redesignated former par. (2) as (3).

Subsec. (d). Pub. L. 95–600, § 701(u)(11)(B), substituted in heading “Definitions and special rules” for “Definitions” and added par. (3).

1976—Subsec. (a)(2)(D). Pub. L. 94–455, § 1901(b)(37)(B), struck out subpar. (D) relating to war loss recoveries.

Amendment by Pub. L. 108–357 applicable to losses for taxable years beginning after Dec. 31, 2006, see section 402(c) of Pub. L. 108–357, set out as a note under section 535 of this title.

Amendment by section 1601(a) of Pub. L. 104–188 applicable to taxable years beginning after Dec. 31, 1995, except as otherwise provided, see section 1601(c) of Pub. L. 104–188, set out as an Effective Date note under section 30A of this title.

Amendment by Pub. L. 103–66 applicable to taxable years beginning after Dec. 31, 1993, see section 13227(f) of Pub. L. 103–66, set out as a note under section 56 of this title.

Section 227(b) of Pub. L. 101–382 provided that: “The amendment made by subsection (a) [amending this section] shall apply to calendar years after 1989.”

Amendment by sections 1002(h)(3) and 1012(h)(2)(B), (j), (n)(4), (5) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Section 6132(b) of Pub. L. 100–647 provided that: “The amendment made by this section [amending this section] shall apply to investments made after the date of the enactment of this Act [Nov. 10, 1988].”

Amendment by section 231(d)(3)(G) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1985, see section 231(g) of Pub. L. 99–514, set out as a note under section 41 of this title.

Amendment by section 701(e)(4)(I) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an Effective Date note under section 55 of this title.

Section 1231(g) of Pub. L. 99–514, as amended by Pub. L. 100–647, title I, § 1012(n)(1)–(3), Nov. 10, 1988, 102 Stat. 3514, provided that:

“(1) In general.—Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 367 and 482 of this title] shall apply to taxable years beginning after December 31, 1986.

“(2) Special rule for transfer of intangibles.—

“(A) In general.—The amendments made by subsection (e) [amending sections 367 and 482 of this title] shall apply to taxable years beginning after December 31, 1986, but only with respect to transfers after November 16, 1985, or licenses granted after such date (or before such date with respect to property not in existence or owned by the taxpayer on such date). In the case of any transfer (or license) which is not to a foreign person, the preceding sentence shall be applied by substituting ‘August 16, 1986’ for ‘November 16, 1985’.

“(B) Special rule for section 936.—For purposes of section 936(h)(5)(C) of the Internal Revenue Code of 1986 the amendments made by subsection (e) shall apply to taxable years beginning after December 31, 1986, without regard to when the transfer (or license), if any, was made.

“(3) Subsection (f).—The amendment made by subsection (f) [amending this section] shall apply to taxable years beginning after December 31, 1982.

“(4) Transitional rule.—In the case of a corporation—

“(A) with respect to which an election under section 936 of the Internal Revenue Code of 1986 (relating to possessions tax credit) is in effect,

“(B) which produced an end-product form in Puerto Rico on or before September 3, 1982,

“(C) which began manufacturing a component of such product in Puerto Rico in its taxable year beginning in 1983, and

“(D) with respect to which a Puerto Rican tax exemption was granted on June 27, 1983,

“(5) Transitional rule for increase in gross income test.—

“(A) In general.—If—

“(i) a corporation fails to meet the requirements of subparagraph (B) of section 936(a)(2) of the Internal Revenue Code of 1986 (as amended by subsection (d)(1)) for any taxable year beginning in 1987 or 1988,

“(ii) such corporation would have met the requirements of such subparagraph (B) if such subparagraph had been applied without regard to the amendment made by subsection (d)(1), and

“(iii) 75 percent or more of the gross income of such corporation for such taxable year (or, in the case of a taxable year beginning in 1988, for the period consisting of such taxable year and the preceding taxable year) was derived from the active conduct of a trade or business within a possession of the United States, such corporation shall nevertheless be treated as meeting the requirements of such subparagraph (B) for such taxable year if it elects to reduce the amount of the qualified possession source investment income for the taxable year by the amount of the shortfall determined under subparagraph (B) of this paragraph.

“(B) Determination of shortfall.—The shortfall determined under this subparagraph for any taxable year is an amount equal to the excess of—

“(i) 75 percent of the gross income of the corporation for the 3-year period (or part thereof) referred to in section 936(a)(2)(A) of such Code, over

“(ii) the amount of the gross income of such corporation for such period (or part thereof) which was derived from the active conduct of a trade or business within a possession of the United States.

“(C) Special rule.—Any income attributable to the investment of the amount not treated as qualified possession source investment income under subparagraph (A) shall not be treated as qualified possession source investment income for any taxable year.”

Amendment by section 1275(a)(1) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 1277 of Pub. L. 99–514, set out as a note under section 931 of this title.

Amendment by section 1812(c)(4)(C) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Amendment by Pub. L. 99–499 applicable to taxable years beginning after Dec. 31, 1986, see section 516(c) of Pub. L. 99–499, set out as a note under section 26 of this title.

Amendment by section 474(r)(22) of Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, and to carrybacks from such years, see section 475(a) of Pub. L. 98–369, set out as a note under section 21 of this title.

Amendment by section 712(g) of Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.

Amendment by section 801(d)(11) of Pub. L. 98–369 applicable to transactions after Dec. 31, 1984, in taxable years ending after such date, see section 805(a)(1) of Pub. L. 98–369, as amended, set out as a note under section 245 of this title.

Amendment by section 201(d)(8)(B) of Pub. L. 97–248 applicable to taxable years beginning after Dec. 31, 1982, see section 201(e)(1) of Pub. L. 97–248, set out as a note under section 5 of this title.

Section 213(e) of Pub. L. 97–248, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

“(1) In general.—Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and sections 246, 367, and 934 of this title] shall apply to taxable years beginning after December 31, 1982.

“(2) Certain sales made after july 1, 1982.—Paragraph (6) of section 936(h) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and so much of section 934 to which such paragraph applies by reason of section 934(e)(4) of such Code, shall apply to taxable years ending after July 1, 1982.

“(3) Certain transfers of intangibles made after august 14, 1982.—Subsection (d) [amending section 367 of this title] shall apply to taxable years ending after August 14, 1982.”

Section 701(u)(11)(C) of Pub. L. 95–600, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendments made by this paragraph [amending this section] shall apply as if included in section 936 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] at the time of its addition by section 1051(b) of the Tax Reform Act of 1976 [Oct. 4, 1976].”

Amendment by Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Section applicable to taxable years beginning after Dec. 31, 1975, except that qualified possession source investment income as defined in subsec. (d)(2) of this section shall include income from any source outside the United States if the taxpayer establishes to the satisfaction of the Secretary of the Treasury or his delegate that the income from such sources was earned before Oct. 1, 1976, see section 1051(i) of Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under section 27 of this title.

For applicability of amendment by section 701(e)(4)(I) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100–647 be treated as if it had been included in the provision of Pub. L. 99–514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100–647, set out as a note under section 861 of this title.

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

Section 441(a) of Pub. L. 98–369, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100–647, title VI, § 6252(b)(1), Nov. 10, 1988, 102 Stat. 3752, which directed Secretary of the Treasury to submit a report to Congress each fourth calendar year on the operation and effect of sections 936 and 934 (b) of this title, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance. See, also, page 142 of House Document No. 103–7.