HB7559 would deny tax deductions for payments made to foreign persons for services benefiting U.S. consumers.
HB7559 amends the Internal Revenue Code to prohibit deductions for outsourcing payments, defined as payments made to foreign persons for labor or services benefiting U.S. consumers. This applies to premiums, fees, royalties, service charges, or other payments made in the course of a trade or business. The provision takes effect for payments made after December 31, 2025. The bill includes a mixed payments rule for payments benefiting both U.S. and foreign consumers.
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