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119-hr-10431119th CongressWALLET

U.S. Innovation and Global Competitiveness Act of 2026

Sponsored By: Representative Estes, Ron [R-KS-4]

Introduced

Summary

H.R. 10431 would deliver a comprehensive overhaul of U.S. international corporate tax rules that boosts export‑related intangible income benefits, rewrites the BEAT base and exceptions, and remakes foreign tax credit and GILTI mechanics.

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  • Domestic multinational corporations would see the Foreign‑Derived Intangible Income deduction rise from 33.34 percent to 40 percent. The bill also clarifies FDII interactions with the dividend‑received deduction and net operating losses and lets general business credits offset BEAT.
  • U.S. shareholders of controlled foreign corporations would get a carryover for net CFC tested losses and face reworked GILTI and deemed‑paid foreign tax credit rules, including repeal of the 90 percent FTC haircut and a reordering of FTC limitation baskets.
  • Tax administrators and territories would face broader Treasury rulemaking power, new triggers and elections for redeterminations of foreign taxes, narrowed Subpart F inclusions for sales and services income, a statutory mechanism to transfer intangibles from CFCs to U.S. shareholders, and adjusted treatment for U.S. Virgin Islands service income.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 0 benefits, 0 costs, 4 mixed.

Changes to the BEAT minimum tax

If enacted, the BEAT minimum tax base would be redefined to equal a taxpayer's regular tax liability for the year. The bill would let Treasury issue rules to recharacterize multi‑party transactions and to implement exceptions. Several exceptions would remove certain payments from BEAT treatment, including payments already taxed or included in income, service payments up to the services' cost, and payments to related parties in jurisdictions with a defined "discriminatory tax." The bill would also exclude payments to related recipients that are taxed at an effective foreign rate of at least 18.9%. All changes would apply for tax years beginning after December 31, 2026.

Fewer Subpart F inclusions for companies

If enacted, foreign base company sales income and services income would be removed from the Subpart F definition, so some CFC earnings would not be immediately included in U.S. taxable income. The bill would also restate who counts as a "related person" for Subpart F by using a more explicit control test (generally more than 50% ownership by vote or value for corporations, and more than 50% beneficial interest for partnerships or trusts). These changes would apply for foreign tax years beginning after December 31, 2026 and to the matching U.S. shareholder years.

Lower taxes for U.S. exporters

If enacted, the FDII deduction rate for qualifying foreign‑derived income would rise from 33.34% to 40%, lowering taxable income for eligible U.S. exporters. The bill would add a look‑through rule so certain interest from a CFC to a related U.S. corporate shareholder can qualify as FDII‑eligible, and it would remove a special FDII NOL adjustment. The law would also change how the dividends‑received deduction interacts with FDII, which could alter how much deduction some corporations can claim. These changes would apply for tax years beginning after December 31, 2026.

More foreign tax relief for multinationals

If enacted, domestic corporations with GILTI inclusions would be treated as having paid their CFCs' foreign taxes in full, removing the prior 90% haircut. The bill would create a five‑year carryover for net CFC tested losses and let taxpayers adjust how those losses affect future tested income. It would let a taxpayer elect to treat redetermined accrued foreign taxes and resulting credits in the year the redetermination happens. These changes would generally apply for foreign tax years beginning after December 31, 2026 and to corresponding U.S. shareholder years.

Sponsors & CoSponsors

Sponsor

Estes, Ron [R-KS-4]

KS • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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