Economic Development Act of 2005 - Authorizes any State to provide to any person for economic development purposes tax incentives that otherwise would be the cause of discrimination against interstate commerce under the Commerce Clause of the Constitution. Makes exceptions for any incentive that: (1) is dependent upon State or country of incorporation, commercial domicile, or residence of an individual; (2) requires the recipient to acquire, lease, license, use, or provide services to property created in the State; (3) is reduced or eliminated as a result of an increase in out-of-State activity by the recipient or other person or as a result of such other person not having a taxable presence in the State; (4) results in loss of a compensating tax system, because the tax on interstate commerce exceeds the tax on intrastate commerce; (5) requires that other taxing jurisdictions offer reciprocal tax benefits; or (6) requires that a tax incentive earned with respect to one tax can only be used to reduce a tax burden for, or provide a tax benefit against any other tax that is not imposed on, apportioned interstate activities.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2471 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 2471
To authorize the States (and subdivisions thereof), the District of
Columbia, territories, and possessions of the United States to provide
certain tax incentives to any person for economic development purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 18, 2005
Mr. Tiberi (for himself, Mr. Chandler, Mr. Lewis of Kentucky, Mr.
Whitfield, Mr. Davis of Kentucky, Mr. Rogers of Kentucky, Mr. Jenkins,
Mr. Camp, Mr. McHugh, Mr. Ney, Mr. Walsh, Mr. Turner, Mrs. Northup, Mr.
Boyd, Mr. Davis of Tennessee, Mr. Cooper, Mr. McIntyre, Mr. Taylor of
Mississippi, Mr. Case, Ms. Herseth, Mr. Holden, Mr. Melancon, Mrs.
Tauscher, Mr. Ross, Mr. Tanner, Mr. Boswell, Ms. Harman, Mr. Bishop of
Georgia, Mr. Cardoza, Mr. Salazar, and Mr. Duncan) introduced the
following bill; which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To authorize the States (and subdivisions thereof), the District of
Columbia, territories, and possessions of the United States to provide
certain tax incentives to any person for economic development purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Economic Development Act of 2005''.
SEC. 2. AUTHORIZATION.
Congress hereby exercises its power under Article I, Section 8,
Clause 3 of the United States Constitution to regulate commerce among
the several States by authorizing any State to provide to any person
for economic development purposes tax incentives that otherwise would
be the cause or source of discrimination against interstate commerce
under the Commerce Clause of the United States Constitution, except as
otherwise provided by law.
SEC. 3. LIMITATIONS.
(a) Tax Incentives not Subject to Protection Under This Act.--
Section 2 shall not apply to any State tax incentive which--
(1) is dependent upon State or country of incorporation,
commercial domicile, or residence of an individual;
(2) requires the recipient of the tax incentive to acquire,
lease, license, use, or provide services to property produced,
manufactured, generated, assembled, developed, fabricated, or
created in the State;
(3) is reduced or eliminated as a direct result of an
increase in out-of-State activity by the recipient of the tax
incentive;
(4) is reduced or eliminated as a result of an increase in
out-of-State activity by a person other than the recipient of
the tax incentive or as a result of such other person not
having a taxable presence in the State;
(5) results in loss of a compensating tax system, because
the tax on interstate commerce exceeds the tax on intrastate
commerce;
(6) requires that other taxing jurisdictions offer
reciprocal tax benefits; or
(7) requires that a tax incentive earned with respect to
one tax can only be used to reduce a tax burden for or provide
a tax benefit against any other tax that is not imposed on
apportioned interstate activities.
(b) No Inference.--Nothing in this section shall be construed to
create any inference with respect to the validity or invalidity under
the Commerce Clause of the United States Constitution of any tax
incentive described in this section.
SEC. 4. DEFINITIONS; RULE OF CONSTRUCTION.
(a) Definitions.--For purposes of this Act--
(1) Compensating tax system.--The term ``compensating tax
system'' means complementary taxes imposed on both interstate
and intrastate commerce where the tax on interstate commerce
does not exceed the tax on intrastate commerce and the taxes
are imposed on substantially equivalent events.
(2) Economic development purposes.--The term ``economic
development purposes'' means all legally permitted activities
for attracting, retaining, or expanding business activity,
jobs, or investment in a State.
(3) Imposed on apportioned interstate activities.--The term
``imposed on apportioned interstate activities'' means, with
respect to a tax, a tax levied on values that can arise out of
interstate or foreign transactions or operations, including
taxes on income, sales, use, gross receipts, net worth, and
value added taxable bases. Such term shall not include taxes
levied on property, transactions, or operations that are
taxable only if they exist or occur exclusively inside the
State, including any real property and severance taxes.
(4) Person.--The term ``person'' means any individual,
corporation, partnership, limited liability company,
association, or other organization that engages in any for
profit or not-for-profit activities within a State .
(5) Property.--The term ``property'' means all forms of
real, tangible, and intangible property.
(6) State.--The term ``State'' means each of the several
States (or subdivision thereof), the District of Columbia, and
any territory or possession of the United States.
(7) State tax.--The term ``State tax'' means all taxes or
fees imposed by a State.
(8) Tax benefit.--The term ``tax benefit'' means all
permanent and temporary tax savings, including applicable
carrybacks and carryforwards, regardless of the taxable period
in which the benefit is claimed, received, recognized,
realized, or earned.
(9) Tax incentive.--The term ``tax incentive'' means any
provision that reduces a State tax burden or provides a tax
benefit as a result of any activity by a person that is
enumerated or recognized by a State tax jurisdiction as a
qualified activity for economic development purposes.
(b) Rule of Construction.--It is the sense of Congress that the
authorization provided in section 2 should be construed broadly and the
limitations in section 3 should be construed narrowly.
SEC. 5. SEVERABILITY.
If any provision of this Act or the application of any provision of
this Act to any person or circumstance is held to be unconstitutional,
the remainder of this Act and the application of the provisions of this
Act to any person or circumstance shall not be affected by the holding.
SEC. 6. EFFECTIVE DATE.
This Act shall apply to any State tax incentive enacted before, on,
or after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
Referred to the Subcommittee on Commercial and Administrative Law.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line