(c) Qualified production activities income
(3) Special rules for determining costs
(C) Transportation costs of independent refiners
(i) In general
In the case of any taxpayer who is in the trade or business of refining crude oil and who is not a major integrated oil company (as defined in section 167(h)(5)(B), determined without regard to clause (iii) thereof) for the taxable year, in computing oil related qualified production activities income under subsection (d)(9)(B), the amount allocated to domestic production gross receipts under paragraph (1)(B) for costs related to the transportation of oil shall be 25 percent of the amount properly allocable under such paragraph (determined without regard to this subparagraph).
Clause (i) shall not apply to any taxable year beginning after December 31, 2021.
(d) Definitions and special rules
(8) Treatment of activities in Puerto Rico
(A) In general
In the case of any taxpayer with gross receipts for any taxable year from sources within the Commonwealth of Puerto Rico, if all of such receipts are taxable under section 1 or 11 for such taxable year, then for purposes of determining the domestic production gross receipts of such taxpayer for such taxable year under subsection (c)(4), the term "United States" shall include the Commonwealth of Puerto Rico.
(B) Special rule for applying wage limitation
In the case of any taxpayer described in subparagraph (A), for purposes of applying the limitation under subsection (b) for any taxable year, the determination of W-2 wages of such taxpayer shall be made without regard to any exclusion under section 3401(a)(8) for remuneration paid for services performed in Puerto Rico.
This paragraph shall apply only with respect to the first 11 taxable years of the taxpayer beginning after December 31, 2005, and before January 1, 2017.
26 U.S.C. § 199
Section, added Pub. L. 108-357, title I, §102(a), Oct. 22, 2004, 118 Stat. 1424; amended Pub. L. 109-135, title IV, §403(a)(1)-(13), Dec. 21, 2005, 119 Stat. 2615-2619; Pub. L. 109-222, title V, §514(a), (b), May 17, 2006, 120 Stat. 366; Pub. L. 109-432, div. A, title IV, §401(a), Dec. 20, 2006, 120 Stat. 2953; Pub. L. 110-343, div. B, title IV, §401(a), (b), div. C, title III, §312(a), title V, §502(c), Oct. 3, 2008, 122 Stat. 3851, 3869, 3876; Pub. L. 111-312, title VII, §746(a), Dec. 17, 2010, 124 Stat. 3319; Pub. L. 112-240, title III, §318(a), Jan. 2, 2013, 126 Stat. 2331; Pub. L. 113-295, div. A, title I, §130(a), title II, §§219(b), 221(a)(37), Dec. 19, 2014, 128 Stat. 4018, 4035, 4043; Pub. L. 114-113, div. P, title III, §305(a), div. Q, title I, §170(a), Dec. 18, 2015, 129 Stat. 3040, 3069, related to deduction of income attributable to domestic production activities.
Subsection (c)(3)(C) of this Section Prior to RepealPrior to repeal by section 13305(a) of Pub. L. 115-97 subsection (c)(3)(C) of this section read as follows:See Amendment Relating to Consolidated Appropriations Act, 2016 note below.
Subsection (d)(8) of this Section Prior to RepealPrior to repeal by section 13305(a) of Pub. L. 115-97 subsection (d)(8) of this section read as follows:See Extension of Deduction Allowable With Respect to Income Attributable to Domestic Production Activities in Puerto Rico note below.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF REPEAL Repeal applicable to taxable years beginning after Dec. 31, 2017, except as provided by transition rule, see section 13305(c) of Pub. L. 115-97 set out as an Effective Date of 2017 Amendment note under sectionof this title.
AMENDMENT RELATING TO CONSOLIDATED APPROPRIATIONS ACT, 2016 Pub. L. 115-141, div. U, title I, §102, Mar. 23, 2018, 132 Stat. 1169, provided that:"(a) AMENDMENT RELATING TO SECTION 305 OF DIVISION P.-For purposes of applying section 199(c)(3)(C)(i) of the Internal Revenue Code of 1986 (as in effect before its repeal by Public Law 115-97) [see Subsection (c)(3)(C) of this Section Prior to Repeal note above] to taxable years beginning after December 31, 2015, and before January 1, 2018, such section shall be applied- "(1) by inserting 'who elects the application of this clause for any taxable year,' after 'In the case of any taxpayer',"(2) by substituting ', and who' for 'and who',"(3) by substituting 'such taxable year' for 'the taxable year', and"(4) by substituting '(as defined in subsection (d)(9)(B))' for 'under subsection (d)(9)(B)'."(b) EFFECTIVE DATE.-The amendment made by this section [amending this section] shall take effect as if included in section 305 of division P of the Consolidated Appropriations Act, 2016 [Pub. L. 114-113]."
EXTENSION OF DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO Pub. L. 115-123, div. D, title I, §403090309,, 132 Stat. 146, provided that: "For purposes of applying section 199(d)(8)(C) of the Internal Revenue Code of 1986 [see Subsection (d)(8) of this Section Prior to Repeal note above] with respect to taxable years beginning during 2017, such section shall be applied-"(1) by substituting 'first 12 taxable years' for 'first 11 taxable years', and"(2) by substituting 'January 1, 2018' for 'January 1, 2017'."
- Internal Revenue Code of 1986
- The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- The term "taxpayer" means any person subject to any internal revenue tax.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.