To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.

Sponsor: Austin Scott (Republican-GA)

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Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Referred to the House Committee on Ways and Means.

Businesses would no longer deduct certain payments for outsourced services to U.S. customers.

This bill would stop businesses from deducting certain payments made to foreign companies. These payments are for services used by U.S. consumers. This change would take effect for payments made after December 31, 2025.

What Would Change

Today, businesses can generally deduct payments made to foreign companies for services. If this bill becomes law, businesses would no longer be able to deduct certain payments. These payments are made to foreign persons for labor or services directed at U.S. consumers. This change would take effect for payments made after December 31, 2025, in taxable years ending after that date.

Key Provisions

Blocks businesses from deducting certain payments made to foreign companies for services used by U.S. consumers.
Defines 'outsourcing payment' to include fees, royalties, or service charges paid to foreign persons for services benefiting U.S. consumers.
Sets a formula for payments that cover services for both U.S. and non-U.S. consumers, only denying deductions for the U.S.-related portion.
Clarifies that a 'foreign person' is anyone not a U.S. person, excluding companies from U.S. possessions.
Gives the Treasury Secretary power to create rules to prevent businesses from avoiding these new tax changes.

View on Congress.gov

HR 7559 · 119th Congress · AI Summary by gemini-2.5-flash · 10/10

Lobbying Activity

2 filings mentioned this bill

Top Lobbying Clients

AMERICAN COUNCIL OF LIFE INSURERS

2 filings

Top Lobbying Firms

1.AMERICAN COUNCIL OF LIFE INSURERS2 filings

Amounts reflect total quarterly lobbying spend reported to the Senate, not bill-specific spending. Source: Senate LDA filings.