Deduction for Domestic Production Activities
RSS Issue FeedBACKGROUND
Internal Revenue Code Section 199 allows businesses to deduct from their taxable income a percentage of what they earn from qualified domestic production activities. Currently, the applicable percentage is 9%, except that the deduction rate for oil-related qualified production activities is limited to 6%. Various activities qualify for the deduction, including the lease or sale of tangible personal property, production of films, production of electricity or natural gas, construction, and performance of architectural services.
Congress enacted Section 199 in 2004 in order to enhance the ability of domestic manufacturers to compete in the global marketplace and to create and preserve U.S. manufacturing jobs.
CHAMBER POSITION
Repealing or narrowing the scope of the Section 199 manufacturing deduction will put U.S. jobs at risk and hurt U.S. manufacturers’ ability to compete in the global marketplace.
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