Page:United States Statutes at Large Volume 118.djvu/1456

 118 STAT. 1426 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(iii) engineering or architectural services per formed in the United States for construction projects in the United States. ‘‘(B) EXCEPTIONS.—Such term shall not include gross receipts of the taxpayer which are derived from— ‘‘(i) the sale of food and beverages prepared by the taxpayer at a retail establishment, and ‘‘(ii) the transmission or distribution of electricity, natural gas, or potable water. ‘‘(5) QUALIFYING PRODUCTION PROPERTY.—The term ‘quali fying production property’ means— ‘‘(A) tangible personal property, ‘‘(B) any computer software, and ‘‘(C) any property described in section 168(f)(4). ‘‘(6) QUALIFIED FILM.—The term ‘qualified film’ means any property described in section 168(f)(3) if not less than 50 percent of the total compensation relating to the production of such property is compensation for services performed in the United States by actors, production personnel, directors, and producers. Such term does not include property with respect to which records are required to be maintained under section 2257 of title 18, United States Code. ‘‘(7) RELATED PERSONS.— ‘‘(A) IN GENERAL.—The term ‘domestic production gross receipts’ shall not include any gross receipts of the taxpayer derived from property leased, licensed, or rented by the taxpayer for use by any related person. ‘‘(B) RELATED PERSON.—For purposes of subparagraph (A), a person shall be treated as related to another person if such persons are treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414, except that determinations under sub sections (a) and (b) of section 52 shall be made without regard to section 1563(b). ‘‘(d) DEFINITIONS AND SPECIAL RULES.— ‘‘(1) APPLICATION OF SECTION TO PASS THRU ENTITIES.— ‘‘(A) IN GENERAL.—In the case of an S corporation, partnership, estate or trust, or other pass thru entity— ‘‘(i) subject to the provisions of paragraphs (2) and (3), this section shall be applied at the shareholder, partner, or similar level, and ‘‘(ii) the Secretary shall prescribe rules for the application of this section, including rules relating to— ‘‘(I) restrictions on the allocation of the deduc tion to taxpayers at the partner or similar level, and ‘‘(II) additional reporting requirements. ‘‘(B) APPLICATION OF WAGE LIMITATION.—Notwith standing subparagraph (A)(i), for purposes of applying sub section (b), a shareholder, partner, or similar person which is allocated qualified production activities income from an S corporation, partnership, estate, trust, or other pass thru entity shall also be treated as having been allocated W–2 wages from such entity in an amount equal to the lesser of—

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