To help protect U.S. companies from the rising threat of intellectual property (IP) theft around the globe, U.S. Rep. Darin LaHood (R-IL) on May 7 sponsored legislation to encourage controlled foreign corporations (CFCs) to transfer their intangible property to United States shareholders.
“As Congress works to counter growing aggression from China, incentivizing the return of American IP through our tax code will strengthen our economic competitiveness on the global stage,” Rep. LaHood said.
The congressman led five original cosponsors, including U.S. Reps. Adrian Smith (R-NE), Carol Miller (R-WV), and Randy Feenstra (R-IA), in proposing the Bringing Back American Jobs Through Intellectual Property Repatriation Act, H.R. 8274, which would remove tax code barriers to help incentivize American businesses to return IP property to the United States.
“The Bringing Back American Jobs Through Intellectual Property Repatriation Act will ensure that we remain the world’s leader in innovation, protect good American jobs, and strengthen our supply chains from growing global challenges,” said Rep. LaHood.
If enacted, H.R. 8274 would allow U.S. companies to bring back their IP developed offshore without any immediate U.S. tax cost, according to a summary provided by the lawmakers, but would continue to tax companies if they sold repatriated IP in the future.
H.R. 8274 also would require that the IP distributed back to the U.S. shareholder must be completed within 180 days of the first transfer between controlled foreign corporations (CFCs) of a U.S. company.
The measure has been referred for consideration to the U.S. House Ways and Means Committee.