Tax incentives for relocating manufacturing to the United States

(a) Accelerated depreciation for nonresidential real property Section 168 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (n) Accelerated depreciation for nonresidential real property acquired in connection with the relocation of manufacturing to the United States (1) Treatment as 20-year property For purposes of this section, qualified nonresidential real property shall be treated as 20-year property. (2) Application of bonus depreciation For application of bonus depreciation to qualified nonresidential real property, see subsection (k). (3) Qualified nonresidential real property For purposes of this subsection, the term qualified nonresidential real property means nonresidential real property placed in service in the United States by a qualified manufacturer if such property is acquired by such qualified manufacturer in connection with a qualified relocation of manufacturing. (4) Qualified manufacturer For purposes of this subsection, the term qualified manufacturer means any person engaged in the trade or business of manufacturing any tangible personal property. (5) Qualified relocation of manufacturing For purposes of this subsection— (A) In general The term qualified relocation of manufacturing means, with respect to any qualified manufacturer, the relocation of the manufacturing of any tangible personal property from a foreign country to the United States. (B) Relocation of property not required For purposes of subparagraph (A), manufacturing shall not fail to be treated as relocated merely because property used in such manufacturing was not relocated. (C) Relocation of not less than equivalent productive capacity required For purposes of subparagraph (A), manufacturing shall not be treated as relocated unless the property manufactured in the United States is substantially identical to the property previously manufactured in a foreign country and the increase in the units of production of such property in the United States by the qualified manufacturer is not less than the reduction in the units of production of such property in such foreign country by such qualified manufacturer. (6) Application to possessions of the United States For purposes of this subsection, the term United States includes any possession of the United States.. (b) Exclusion of gain on disposition of property in connection with qualified relocation of manufacturing (1) In general Part III of subchapter B of chapter 1 of such Code is amended by inserting after section 139I the following new section: 139J. Exclusion of gain on disposition of property in connection with qualified relocation of manufacturing (a) In general In the case of a qualified manufacturer, gross income shall not include gain from the sale or exchange of qualified relocation disposition property. (b) Qualified relocation disposition property For purposes of this section, the term qualified relocation disposition property means any property which— (1) is sold or exchanged by a qualified manufacturer in connection with a qualified relocation of manufacturing, and (2) was used by such qualified manufacturer in the trade or business of manufacturing any tangible personal property in the foreign country from which such manufacturing is being relocated. (c) Other terms Terms used in this section which are also used in subsection (n) of section 168 shall have the same meaning when used in this section as when used in such subsection.. (2) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139I the following new item: Sec. 139J. Exclusion of gain on disposition of property in connection with qualified relocation of manufacturing.. (c) Effective dates (1) Accelerated depreciation The amendment made by subsection (a) shall apply to property placed in service after the date of the enactment of this Act. (2) Exclusion of gain The amendments made by subsection (b) shall apply to sales and exchanges after the date of the enactment of this Act.