A bill to amend the Internal Revenue Code of 1954 to clarify the extent to which a state or political subdivision thereof may tax certain income from sources outside the United States.

Amends the Internal Revenue Code to prohibit State taxation of the foreign source income of a corporation or any income of an affiliated corporation that derives more than 80 percent of its income from foreign sources. Provides that the determination of the source of income shall be made solely on the basis of the provisions for determining the source of income in the Internal Revenue Code.