This bill prevents businesses from lowering their taxable income by deducting payments made to foreign companies for services that help U.S. consumers. It aims to discourage outsourcing by increasing costs for companies that rely on foreign labor.
This bill disallows a federal tax deduction for outsourcing payments. The bill defines outsourcing payments as any premium, fee, royalty, service charge, or other payment madein the course of a trade or business, to a foreign person (excluding a corporation or partnership organized under the laws of the United States or a U.S. possession), andfor labor or services which benefit (directly or indirectly) U.S. consumers.