H.R. 2005 – Offshoring Prevention Act

AI-Generated Summary

Updated April 15, 2026 at 2:35 PM UTC

The Offshoring Prevention Act would change U.S. tax law so that U.S. shareholders of controlled foreign corporations (CFCs) must include in their taxable income any profit the CFC earns from property that is imported into the United States. By adding this "imported property income" to the existing Subpart F rules, the bill aims to prevent companies from shifting profits offshore and then bringing them back through imported goods.

Key Provisions

Adds a new category called “imported property income” to Subpart F (Section 954) so that CFC earnings from manufacturing, selling, leasing or licensing property imported into the U.S. are taxable to U.S. shareholders.
Defines “imported property” as goods brought into the United States by the CFC or a related party, and also includes property sold to an unrelated party when it was reasonably expected to be imported or used in imported goods.
Provides exceptions for oil and gas extraction income, agricultural commodities not grown domestically in marketable quantities, and property that is exported again before substantial U.S. use.
Treats imported property income separately for foreign tax‑credit limits under Section 904, ensuring the credit cannot be used to offset U.S. tax on this income.
Makes related technical adjustments throughout the tax code to align with the new definition and applies the changes to taxable years beginning after the law’s enactment.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

April 6, 2017

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HouseIntro Referral

Introduced in House

April 6, 2017

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

April 6, 2017

Floor Debate

3 members

What members said about H.R. 2005 on the floor

2 Republicans1 Democrat

Rep. David P. RoeR-TN-1 · Jul 24, 2017

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2006) to amend title 38, United States Code, to improve the procurement practices of the Department of Veterans Affairs, and for other…

Rep. Mike CoffmanR-CO-6 · Jul 24, 2017

Mr. Speaker, one of the VA's top procurement goals is to achieve savings through competition. However, there is no uniformity in how the savings are calculated or if they are recorded at all. This is…

Rep. Timothy J. WalzD-MN-1 · Jul 24, 2017

Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I feel so strongly about this, I am going to support it again today. I urge my colleagues to support H.R. 2006, and I reserve the…

Bill Text

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Introduced in HouseIssued April 6, 2017

I

115th CONGRESS

1st Session

H. R. 2005

IN THE HOUSE OF REPRESENTATIVES

April 6, 2017

Mr. Cicilline introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide for the taxation of income of controlled foreign corporations attributable to imported property.

1.

Short title

This Act may be cited as the Offshoring Prevention Act.

2.

Taxation of income of controlled foreign corporations attributable to imported property

(a)

In general

Section 954(a) of the Internal Revenue Code of 1986 is amended by striking the period at the end of paragraph (5) and inserting , and, by redesignating paragraph (5) as paragraph (4), and by adding at the end the following new paragraph:

(5)

imported property income for the taxable year (determined under subsection (j) and reduced as provided in subsection (b)(5)).

.

(b)

Imported property income defined

Section 954 of such Code is amended by adding at the end the following new subsection:

(j)

Imported property income

(1)

In general

For purposes of subsection (a)(5), the term imported property income means income (whether in the form of profits, commissions, fees, or otherwise) derived in connection with—

(A)

manufacturing, producing, growing, or extracting imported property;

(B)

the sale, exchange, or other disposition of imported property; or

(C)

the lease, rental, or licensing of imported property.

Such term shall not include any foreign oil and gas extraction income (within the meaning of section 907(c)) or any foreign oil related income (within the meaning of section 907(c)).

(2)

Imported property

For purposes of this subsection—

(A)

In general

Except as otherwise provided in this paragraph, the term imported property means property which is imported into the United States by the controlled foreign corporation or a related person.

(B)

Imported property includes certain property imported by unrelated persons

The term imported property includes any property imported into the United States by an unrelated person if, when such property was sold to the unrelated person by the controlled foreign corporation (or a related person), it was reasonable to expect that—

(i)

such property would be imported into the United States; or

(ii)

such property would be used as a component in other property which would be imported into the United States.

(C)

Exception for property subsequently exported

The term imported property does not include any property which is imported into the United States and which—

(i)

before substantial use in the United States, is sold, leased, or rented by the controlled foreign corporation or a related person for direct use, consumption, or disposition outside the United States; or

(ii)

is used by the controlled foreign corporation or a related person as a component in other property which is so sold, leased, or rented.

(D)

Exception for certain agricultural commodities

The term imported property does not include any agricultural commodity which is not grown in the United States in commercially marketable quantities.

(3)

Definitions and special rules

(A)

Import

For purposes of this subsection, the term import means entering, or withdrawal from warehouse, for consumption or use. Such term includes any grant of the right to use intangible property (as defined in section 936(h)(3)(B)) in the United States.

(B)

United states

For purposes of this subsection, the term United States includes the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

(C)

Unrelated person

For purposes of this subsection, the term unrelated person means any person who is not a related person with respect to the controlled foreign corporation.

(D)

Coordination with foreign base company sales income

For purposes of this section, the term foreign base company sales income shall not include any imported property income.

.

(c)

Separate application of limitations on foreign tax credit for imported property income

(1)

In general

Section 904(d)(1) of such Code is amended by striking and at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph:

(B)

imported property income, and

.

(2)

Imported property income defined

Section 904(d)(2) of such Code is amended by redesignating subparagraphs (I), (J), and (K) as subparagraphs (J), (K), and (L), respectively, and by inserting after subparagraph (H) the following new subparagraph:

(I)

Imported property income

The term imported property income means any income received or accrued by any person which is of a kind which would be imported property income (as defined in section 954(j)).

.

(3)

Conforming amendment

Section 904(d)(2)(A)(ii) of such Code is amended by inserting or imported property income after passive category income.

(d)

Conforming amendments

(1)

Section 952(c)(1)(B)(iii) of such Code is amended—

(A)

by redesignating subclauses (II), (III), (IV), and (V) as subclauses (III), (IV), (V), and (VI), and

(B)

by inserting after subclause (I) the following new subclause:

(II)

imported property income,

.

(2)

The last sentence of section 954(b)(4) of such Code is amended by striking subsection (a)(5) and inserting subsection (a)(4).

(3)

Section 954(b)(5) of such Code is amended by striking and the foreign base company oil related income and inserting the foreign base company oil related income, and the imported property income.

(e)

Effective date

The amendments made by this section shall apply to taxable years of foreign corporations beginning after the date of the enactment of this Act, and to taxable years of United States shareholders within which or with which such taxable years of such foreign corporations end.