U.S. Rep. Darin LaHood (R-IL) recently introduced legislation to remove obstacles within the nation’s tax code that discourage businesses from returning intellectual property (IP) to the United States.
“COVID-19 has illuminated the significant dangers of losing domestic supply chains to countries around the globe, particularly China,” said Rep. LaHood. “Incentivizing the return of intellectual property to the United States will ensure that we remain the world’s leader in innovation, protect good American jobs, and enable businesses to better compete with foreign companies.”
Rep. LaHood sponsored the Bringing Back American Jobs Through Intellectual Property Repatriation Act, H.R. 2031, with lead cosponsor U.S. Rep. Drew Ferguson (R-GA), which would encourage the transfer of intangible property from controlled foreign corporations to U.S. shareholders, according to the congressional record bill summary.
If enacted, H.R 2031 would permit American companies to bring back their IP developed offshore without any immediate U.S. tax cost, but they still would have to pay tax if they sell the IP in the future, according to a bill summary provided by Rep. LaHood’s office.
Additionally, H.R. 2031 would allow businesses to continue to hold and use formerly foreign IP within the U.S. to support American production and associated research and development, the summary says.
“In order for our country’s IP to remain secure and competitive, companies need tax policies that will support the ingenuity and innovation needed for a continued economic rebound,” Rep. Ferguson said. “If we can return IP to American shores, we can return the manufacturing along with it.”
The bill was initially introduced during the 116th Congress as part of the Agenda for a Healthy American Economy introduced by Republicans in the U.S. House Ways and Means Committee, which is now reviewing H.R. 2031.