Page:United States Statutes at Large Volume 114 Part 4.djvu/366

 114 STAT. 2428 PUBLIC LAW 106-519—NOV. 15, 2000 "(c) EXCEPTION FROM FOREIGN ECONOMIC PROCESS REQUIRE- MENT.— "(1) IN GENERAL.— The requirements of subsection (b) shall be treated as met for any taxable year if the foreign trading fross receipts of the taxpayer for such year do not exceed 5,000,000. Regulations. " (2) RECEIPTS OF RELATED PERSONS AGGREGATED.— A ll related persons shall be treated as one person for purposes of paragraph (1), and the limitation under paragraph (1) shall be allocated among such persons in a manner provided in regulations prescribed by the Secretary. Applicability. "(3) SPECIAL RULE FOR PASS-THRU ENTITIES. —In the case of a partnership, S corporation, or other pass-thru entity, the limitation under paragraph (1) shall apply with respect to the partnership, S corporation, or entity and with respect to each partner, shareholder, or other owner. "SEC. 943. OTHER DEFINITIONS AND SPECIAL RULES. "(a) QUALIFYING FOREIGN TRADE PROPERTY. —For purposes of this subpart— "(1) IN GENERAL.— The term 'qualifying foreign trade propert5^ means property— "(A) manufactured, produced, grown, or extracted within or outside the United States, "(B) held primarily for sale, lease, or rental, in the ordinary course of trade or business for direct use, consumption, or disposition outside the United States, and "(C) not more than 50 percent of the fair market value of which is attributable to— "(i) articles manufactured, produced, grown, or extracted outside the United States, and "(ii) direct costs for labor (determined under the principles of section 263A) performed outside the United States. For purposes of subparagraph (C), the fair market value of any article imported into the United States shall be its appraised value, as determined by the Secretary under section 402 of the Tariff Act of 1930 (19 U.S.C. 1401a) in connection with its importation, and the direct costs for labor under clause (ii) do not include costs that would be treated under the principles of section 263A as direct labor costs attributable to articles described in clause (i). " (2) U.S. TAXATION TO ENSURE CONSISTENT TREATMENT. — Property which (without regard to this paragraph) is qualifying foreign trade property and which is manufactured, produced, grown, or extracted outside the United States shall be treated as qualifying foreign trade property only if it is manufactured, produced, grown, or extracted by— "(A) a domestic corporation, "(B) an individual who is a citizen or resident of the United States, "(C) a foreign corporation with respect to which an election under subsection (e) (relating to foreign corporations electing to be subject to United States taxation) is in effect, or

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