Repatriation Provisions in FSC-ETI Bill
June 24, 2004
Congress took a major step last week toward completion of the FSC-ETI international tax bill with passage of the long-stalled House version of the bill. This follows Senate passage of a different version in May. The Congressional leadership now will seek to reconcile the two versions in a House-Senate conference committee.
Both versions of the bill include the so-called repatriation legislation, known officially in the Senate as the Invest in the U.S.A. Act and in the House as the Homeland Investment Act. The repatriation legislation, which varies in detail between the two bills, provides for a temporary effective tax rate of 5.25 percent on “extraordinary distributions” from controlled foreign corporations. The legislation enjoys the backing of the leadership in both the House and the Senate and appears highly likely to be included in any final bill to emerge from the conference committee.
This memorandum describes several issues that you should consider if you anticipate taking advantage of the legislation. Attached to the memorandum is a comparison of the two versions of the legislation and the potential impact on state and federal tax issues.
To view the entire white paper in PDF Fomat, please click here.
