House Passes Legislation To Repeal the FSC/ETI Tax Regime, Extend MPF and Other User Fees, Etc
On June 17, 2004, the House of Representatives passed H.R. 4520, the American Jobs Creation Act which would, among other things, repeal the Foreign Sales Corporation/Extraterritorial Income Act (FSC/ETI) tax regime, extend the Merchandise Processing Fee (MPF) and other user fees, etc.
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The Senate passed its own version of FSC/ETI repeal legislation, the Jumpstart Our Business Strength (JOBS) Act (S. 1637), on May 11, 2004. (See ITT's Online Archives or 05/13/04 news, 04051399 1, for previous BP summary on the Senate's passage of S. 1637.).
This is Part II of a multi-part series of summaries highlighting H.R. 4520 and covers provisions to repeal the FSC/ETI tax regime and provide new or extend existing duty-free treatment to certain ceiling fans and parts used in nuclear facilities. See future issues for additional summaries.
Repeal of the FSC/ETI Tax Regime
H.R. 4520 would amend the Internal Revenue Code of 1986 to repeal the Foreign Sales Corporation/Extraterritorial Income Act (FSC/ETI) tax regime.
According to a House Ways and Means Committee press release, the repeal of the FSC/ETI tax regime will immediately end European Union (EU) tariffs on U.S. manufacturers and farmers.
(Since March 1, 2004, the EU has imposed additional customs duties on imports of certain U.S.-origin products in connection with the EU's World Trade Organization (WTO) dispute over the U.S. FSC/ETI tax regime. The additional duties imposed on certain U.S.-origin products have increased by 1% each month since their imposition and, as of July 1, 2004, these duties are 9%. See ITT's Online Archives or 03/01/04 news, 04030105, for previous BP summary.)
In addition, a EU Trade Commissioner press release states that the moment that WTO-compliant legislation becomes law, the EU will immediately repeal the additional duties imposed on certain U.S.-origin products.
Duty-Free Treatment for Ceiling Fans in HTS 8414.51.00
H.R. 4520 would create a new HTS Chapter 99 provision (HTS 9902.84.14) that would provide duty-free treatment for ceiling fans for permanent installation (provided for in HTS 8414.51.00) through December 31, 2006.
Duty-Free Treatment for Certain Steam Generators and Reactor Vessel Heads Used in Nuclear Facilities
H.R. 4520 would amend HTS 9902.84.02 in order to extend the duty-free treatment provided for watertube boilers with a steam production exceeding 45 t per hour, for use in nuclear facilities (provided for in HTS 8402.11.00) through December 31, 2008. (Such duty-free treatment is currently scheduled to end after December 31, 2006.)
H.R. 4520 would also create a new HTS Chapter 99 provision (HTS 9902.84.03) that would provide duty-free treatment for reactor vessel heads for nuclear reactors (provided for in HTS 8401.40.00) through December 31, 2008.
(See ITT's Online Archives or 07/01/04 news, 04070105, for Part I of this multi-part series of summaries.)
H.R. 4520 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:h4520pcs.txt.pdf.House Ways and Means Committee press release (dated 06/17/04) available at
http://waysandmeans.house.gov/News.asp?FormMode=release&ID=228.
EU statement on the House passage of H.R. 4520 (dated 06/18/04) available at