On October 1, 2003, the Senate Finance Committee cleared the Jumpstart Our Business Strength (JOBS) Bill (Sen 1637). Besides repealing the extra-territorial income (ETI) provisions of the Code over a period of three years, the legislation includes a number of tax cuts for business and additional revenue raisers beyond ETI repeal to pay for them. A key provision of the bill is a three percentage point tax rate cut for domestic manufacturers. The bill also includes a number of provisions modifying the international tax regime of the Code and additional tax breaks for manufacturers. Among the list of revenue raising provisions are an increase in the age limit at which unearned income of a child is taxed at the parent’s tax rate from 14 to 18 and an increase in the weight limits for vehicles subject to the depreciation limits for luxury automobiles. The bill becomes the first ETI repeal bill to emerge from a Congressional tax committee. There are two principal competing bills in the House, and neither has yet emerged from the Ways and Means Committee. There are significant differences in these three versions of the legislation. The European Union continues to state that it will impose sanctions unless an ETI repeal bill passes Congress this year and has indicated that a three-year phase-out is too long. With the House in recess next week, the current adjournment date set for the end of October, and a lot of appropriations work remaining, time is short to resolve these differences and to attend to the several pieces of tax legislation still working their way through the process.
