Outsourcing excise tax

(a) In general Subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter: 50B Outsourcing Sec. 5000E. Outsourcing payments. 5000E. Outsourcing payments (a) Imposition of tax There is hereby imposed a tax on any United States person making an outsourcing payment a tax equal to 25 percent of the amount of such payment. (b) Outsourcing payment For purposes of this section— (1) In general The term outsourcing payment means any premium, fee, royalty, service charge, or other payment made— (A) in the course of a trade or business, (B) to a foreign person, and (C) with respect to labor or services the benefit of which is directed, directly or indirectly, to consumers located in the United States. (2) Mixed payments In the case of any payment to a foreign person with respect to which labor or services are directed to consumers both within and without the United States, the amount treated as an outsourcing payment shall not exceed the amount equal to the product of such payment and a fraction— (A) the numerator of which is the amount of labor or services with respect to such payment directed to consumers within the United States, to (B) the labor or services with respect to such payment directed to all consumers. (c) Foreign person For purposes of this section, the term foreign person means any person who is not a United States person, except that such term shall not include any corporation or partnership which is organized under the laws of a possession of the United States. (d) Regulations and other guidance The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, including regulations or guidance to prevent the avoidance or abuse of the purposes of this section, including through the use of related parties, controlled foreign corporations, and other intermediaries, or through the use of transfer pricing arrangements.. (b) Tax not deductible Section 275(a)(6) of the Internal Revenue Code of 1986 is amended by inserting 50B, after 50A. (c) Reporting The Secretary of the Treasury, or the Secretary's delegate, may— (1) require United States persons making payments to foreign persons (as defined in section 5000E of the Internal Revenue Code of 1986, as added by subsection (a)) to file a return of tax under section 5000E of such Code or to file an information return concerning such payments, which may include— (A) information on whether such payments are outsourcing payments (as defined in section 5000E of such Code), and (B) such other information concerning such payment as the Secretary may reasonably require to enforce the amendments made by this section, and (2) require the officers of any corporation to certify on such return, under penalty of perjury, the character of such payments. For purposes part II of subchapter B of chapter 68 of the Internal Revenue Code of 1986, any return required to be filed under paragraph (1) shall be treated as an information return. (d) Increased penalty for failure To pay tax Section 6651(a) of the Internal Revenue Code is amended by adding at the end the following new sentence: In the case of the failure to pay any tax imposed under chapter 50B, paragraphs (2) and (3) shall be applied by substituting 50 percent for 05. percent each place it appears and without regard to the phrase not exceeding 25 percent in the aggregate each place it appears.. (e) No inference Nothing in this section or the amendments made by this section shall be construed to limit the application of the economic substance doctrine with respect to any payment described in section 5000E(b) of the Internal Revenue Code of 1986, as added by subsection (a). (f) Clerical amendment The table of chapters for subpart D of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Chapter 50B—Outsourcing. (g) Effective date The amendments made by this section shall apply to payments made after December 31, 2025.