S. 2976

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to impose an excise tax on payments by United States taxpayers to foreign persons for services provided to United States consumers, and for other purposes.

IN THE SENATE OF THE UNITED STATES · October 6, 2025 · Sponsor: Mr. Moreno · Committee: Committee on Finance

Table of contents

• S. 2976
  • Sec. 5000E. Outsourcing payments.

Sec. 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—
      • in the course of a trade or business,
      • to a foreign person, and
      • 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—
      • the numerator of which is the amount of labor or services with respect to such payment directed to consumers within the United States, to
      • 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.