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1. To Amend the Internal Revenue Code of 1954 to Clarify the Application
of the Investment Tax Credit, the Deduction for Depreciation, and the
Income Source Rules with Respect to Property Used, and Services Performed,
in Space. (in the House of Representatives April 23 (Legislative Day,
April 22), 1985, Mr. Downey of New York (for Himself and Mr. Nelson of
Florida) Introduced the Following Bill
Be it enacted by the Senate and House of
Representatives of the United States of America in Congress assembled,
SECTION 1.
SHORT TITLE.
This Act may
be cited as the "Space Investment Tax Equity Act of 1985".
SEC. 2.
INVESTMENT TAX CREDIT ALLOWED FOR CERTAIN PROPERTY USED IN SPACE.
(a)
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In
General.—Paragraph (2) of section 48(a) of the Internal Revenue Code of
1954 (relating to property used outside the United States) is amended by adding
at the end thereof the following new subparagraph:
"(C) Treatment
of certain property used in space.—For purposes of subparagraph (A), in
the case of property (or any interest therein) of a United States person, use
of such property in space shall not be treated as use outside the United States
if—
"(i) |
such property is a spacecraft which,
while in space, is substantially controlled from 1 or more facilities located
in the United States, or
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"(ii) |
such property is used on a spacecraft in
space while such spacecraft is so controlled."
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(b)
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Effective
Date.—The amendment made by this section shall apply (to property placed
in service after December 31, 1985) (to periods after December 31, 1985, under
rules similar to the rules of section 48(m) of the Internal Revenue Code of
1954).
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SEC. 3. PROPERTY NOT TREATED AS NONDEPRECIABLE
BY REASON OF USE IN SPACE.
(a) |
In
General.—Subsection (c) of section 168 of the Internal Revenue Code of
1954 (relating to accelerated cost recovery system) is amended by adding at the
end thereof the following new paragraph:
"(3) Treatment
of property used in space.—Property which is of a character subject to
the allowance for depreciation if used on Earth shall not cease to have such
character if used in space."
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(b)
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Effective
Date.—The amendment made by subsection (a) shall apply to property
placed in service after December 31, 1985.
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SEC. 4. CERTAIN INCOME FROM ACTIVITIES
CONDUCTED IN SPACE TREATED AS UNITED STATES SOURCE INCOME.
(a)
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In
General.—Section 861 of the Internal Revenue Code of 1954 (relating to
income from sources within the United States) is amended by adding at the end
thereof the following new subsection:
"(g) Treatment
of Certain Income Derived From Activities in Space.—
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"(1)
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In
general.—The following amounts includible in gross income by the
taxpayer shall be treated as income from sources within the United States for
purposes of subsection (a) and section 862(a):
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"(A)
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Amounts received or accrued for the use,
or right to use, any property (or an interest therein) of the taxpayer while
such property is in space on a qualified spacecraft (in the same manner as if
such property had been used within the United States).
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"(B) |
Compensation received or accrued by the
taxpayer for services performed by the taxpayer while on a qualified spacecraft
(in the same manner as if such services had been performed in the United
States).
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"(2)
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Qualified
spacecraft.—For purposes of this subsection, the term 'qualified
spacecraft' means any craft which, while in space, is substantially controlled
from 1 or more facilities located in the United States."
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(b)
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Effective
Date.—The amendments made by this section shall apply to taxable years
beginning after December 31, 1985.
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