The Senate tax bill that’s due to be released Thursday won’t include an excise tax on certain payments U.S. multinationals make to overseas affiliates, according to a person familiar with the legislation.

A proposal to apply a 20 percent tax to payments U.S. companies make to related units overseas surfaced in legislation that the House has been considering for the past week. The tax would apply to royalty payments and other payments for costs of goods sold that are currently tax deductible. Royalties paid for overseas intellectual property constitute a widely used method for companies to shift profit offshore to units in lower-tax jurisdictions.

Multinational companies of various sorts opposed the excise tax provision, and House Ways and Means Chairman Kevin Brady amended the bill earlier this week. That amendment effectively gutted the measure, according to a score provided by Congress’s Joint Committee on Taxation.

The Senate bill won’t include the excise tax idea, said the person, who asked not to be named because the legislation hasn’t been made public.

The U.S. Capitol

Bloomberg News