Amends the Internal Revenue Code, with respect to the tax on nonresident alien individuals, to: (1) make permanent the tax exemption for interest-related dividends and short-term capital gain dividends received from a regulated investment company, and (2) expand the categories of interest-related dividends for which a tax exemption is allowed.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4555 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4555
To amend the Internal Revenue Code of 1986 to expand and make permanent
rules related to investment by nonresident aliens in domestic mutual
funds.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 1, 2014
Mr. Paulsen (for himself and Mr. Campbell) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to expand and make permanent
rules related to investment by nonresident aliens in domestic mutual
funds.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXEMPTION FOR CERTAIN DIVIDENDS PAID BY REGULATED INVESTMENT
COMPANIES TO NONRESIDENT ALIENS EXPANDED AND MADE
PERMANENT.
(a) Exemptions for Certain Dividends Made Permanent.--
(1) Interest-related dividends.--Subparagraph (C) of
section 871(k)(1) of the Internal Revenue Code of 1986 is
amended by striking clause (v).
(2) Capital gain dividends.--Subparagraph (C) of section
871(k)(2) of such Code is amended by striking clause (v).
(b) Expansion of Exemption for Interest-Related Dividends.--
(1) In general.--Subparagraph (E) of section 871(k)(1) of
such Code is amended by striking clauses (iii) and (iv) and
inserting the following new clauses:
``(iii) Any amount referred to in
subsection (i)(2)(A) (without regard to the
trade or business of the regulated investment
company) or in subsection (i)(2)(B).
``(iv) Any interest which is exempt from
tax under section 103 or any other provision of
law without regard to the identity of the
holder.
``(v) Any other amount includible in gross
income that is determined by reference to an
interest rate and that would not be subject to
withholding under section 1441 if received by a
nonresident alien individual.
``(vi) Any amount includible in gross
income from sources without the United States.
``(vii) Any qualified income-related
dividend includible in gross income with
respect to stock of another regulated
investment company.''.
(2) Modification of exceptions.--Clause (i) of section
871(k)(1)(B) is amended by striking ``interest (other than
interest described in subparagraph (E)(i) or (iii))'' and
inserting ``interest described in subparagraph (E)(ii) (and not
described in subparagraph (E) (i), (iii), or (iv))''.
(3) Conforming amendments.--
(A) Paragraph (1) of section 871(k) of such Code is
amended--
(i) by striking ``interest-related
dividend'' each place it appears in the text
and inserting ``qualified income-related
dividend'',
(ii) by striking ``qualified net interest
income'' each place it appears in the text and
inserting ``qualified net income'',
(iii) by striking ``qualified interest
income'' each place it appears in the text and
inserting ``qualified income'',
(iv) by striking ``Interest-related
dividends'' in the heading thereof and
inserting ``Qualified income-related
dividends'',
(v) by striking ``Interest related
dividend'' in the heading of subparagraph (C)
and inserting ``Qualified income-related
dividend'',
(vi) by striking ``Qualified net interest
income'' in the heading of subparagraph (D) and
inserting ``Qualified net income'', and
(vii) by striking ``Qualified interest
income'' in the heading of subparagraph (E) and
inserting ``Qualified income''.
(B) Paragraph (1) of section 881(e) of such Code is
amended--
(i) by striking ``interest-related
dividend'' each place it appears in
subparagraphs (A) and (B) and inserting
``qualified income-related dividend'',
(ii) by striking ``interest received'' in
subparagraph (B)(ii) and inserting ``interest
described in clause (ii) of section
871(k)(1)(E) (and not described in clause (i),
(iii), or (iv) of such section) received'',
(iii) by striking ``interest-related
dividend received'' in subparagraph (C) and
inserting ``qualified income-related dividend
received from a regulated investment company'',
(iv) by striking ``clause (i) or (iii)'' in
subparagraph (C) and inserting ``clause (i),
(iii), or (iv)'', and
(v) by striking ``Interest-related
dividends'' in the heading thereof and
inserting ``Qualified income-related
dividends''.
(c) Effective Date.--The amendments made by this section shall
apply to dividends with respect to taxable years of regulated
investment companies beginning after December 31, 2013.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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