To amend the Internal Revenue Code of 1986 with respect to the allocation of research and experimental expenditures.

Amends the Internal Revenue Code with respect to the allocation and apportionment of qualified research and experimental expenditures to sources within and outside the United States for income tax purposes.

Requires that any such expenditures made solely to meet a political jurisdiction's legal requirements concerning products or processes unlikely to yield extrajurisdictional income be allocated only to income within that political jurisdiction.

Increases from 50 to 67 percent the amount of research and experimental expenditures that a company must allocate to income from U.S. sources.

Requires companies to report on a consolidated basis with respect to the expenditures associated with these source rules.