Democrats on the House Ways and Means Committee have introduced a bill to provide tax credits to businesses that brings jobs and business operations back to the U.S. from abroad.

The Bring Jobs Home Act, introduced Thursday by Rep. Bill Pascrell, D-N.J., provides a 20 percent tax credit for businesses that “insource” jobs back to the United States and is paid for by closing tax loopholes for companies that “outsource” jobs overseas and treat distributions of debt securities in a tax-free spin-off transaction in the same manner as distributions of cash or other property.

President Obama has called on Congress to provide more incentives for so-called “insourcing” and included the proposal in his fiscal 2013 budget (see Obama to Propose ‘Insourcing’ Tax Incentives).

The Bring Jobs Home Act is the fifth measure introduced in recent weeks as part of the No Excuses agenda as Democrats seek to encourage Republicans to act on measures to spur job growth. Other bills in the package include the Wind Powering American Jobs Act, the Hire Now Act, Invest in America Now Act, and the Investing in American Innovation Act of 2012. Pascrell had previously introduced similar legislation in conjunction with Sen. Debbie Stabenow, D-Mich. (see Legislation Would Cut Taxes for Companies That Move Jobs to U.S.).

“I'm pleased that the Bring Jobs Home Act is part of the ‘No Excuses Agenda,’ and it should be a top priority for Congress,” Pascrell said in a statement. “There is no question we should help companies bring jobs back home and stop the corporate welfare for outsourcing in the Tax Code.”

The bill would create a new tax credit to provide an incentive for U.S. companies to move jobs from overseas back to America. Specifically, the legislation would allow companies to qualify for a tax credit equal to 20 percent of the cost associated with bringing jobs and business activity back to the U.S.

To pay for the cost of the bill, the Bring Jobs Home Act would end a tax deduction for companies that outsource jobs and business activity. The cost of moving personnel and components of a company to a new location is defined as a business expense that qualifies for a tax deduction, and the bill would tigtehn these requirements.

Under present law, taxes are generally imposed on parent corporations where they extract value in excess of basis from their subsidiaries prior to engaging in a tax-free spin-off transaction.  Therefore, if a subsidiary corporation distributes cash or other property to its parent in excess of the parent’s basis in the subsidiary or if a subsidiary corporation assumes parent debt in excess of the parent’s basis in the subsidiary, the parent corporation will recognize gain.  However, taxes are not assessed if a subsidiary corporation distributes its own debt securities to a parent corporation prior to a spin off transaction even where the value of these securities would exceed the parent corporation’s basis in its subsidiary.  The bill would treat distributions of debt securities in a tax-free spin-off transaction in the same manner as distributions of cash or other property.

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