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To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.
To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.
Summary
This bill would amend the Internal Revenue Code to deny tax deductions for "outsourcing payments," defined as payments made by U.S. businesses to foreign persons for labor or services that benefit U.S. consumers. The bill applies to any premiums, fees, royalties, service charges, or other payments for such services. For payments where labor or services benefit both U.S. and non-U.S. consumers, only the portion attributable to U.S. consumers would be treated as a non-deductible outsourcing payment. The Secretary of the Treasury would be authorized to issue regulations to prevent avoidance of the provision, including through transfer pricing arrangements. The provision would take effect for payments made after December 31, 2025.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Rep. Scott, Austin [R-GA-8] (R-GA)
Money behind the sponsor
Top reported contributors to Austin Scott’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- CME GROUP $5,000
- JDS HOLDINGS LLC $3,300
- OFFICE OF KAT TAYLOR $3,300
- BIG ROCK EQUITIES $3,300
- THE RUSSELL GROUP $3,000
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for Austin Scott → · Outside spending →
Actions (2)
- Feb 12, 2026 Referred to the House Committee on Ways and Means. · house
- Feb 12, 2026 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE HOUSE OF REPRESENTATIVES
February 12, 2026
Mr. Austin Scott of Georgia 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 deny deduction for outsourcing payments.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SEC. 1. DENIAL OF INCOME TAX DEDUCTION ON OUTSOURCING PAYMENTS.
(a) In General.—Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“SEC. 280I. OUTSOURCING PAYMENTS.
“(a) In General.—No deduction shall be allowed under this chapter for any outsourcing payment.
“(b) Outsourcing Payment.—For purposes of this section—
“(1) In general.—The term ‘outsourcing payment’ means any premium, fee, royalty, service charge, or other payment made—
“(A) in the course of a trade or business,
“(B) to a foreign person, and
“(C) with respect to labor or services the benefit of which is directed, directly or indirectly, to consumers located in the United States.
“(2) Mixed payments.—In the case of any payment to a foreign person with respect to which labor or services are directed to consumers both within and without the United States, the amount treated as an outsourcing payment shall not exceed the amount equal to the product of such payment and a fraction—
“(A) the numerator of which is the amount of labor or services with respect to such payment directed to consumers within the United States, to
“(B) the labor or services with respect to such payment directed to all consumers.
“(c) Foreign Person.—For purposes of this section, the term ‘foreign person’ means any person who is not a United States person, except that such term shall not include any corporation or partnership which is organized under the laws of a possession of the United States.
“(d) Regulations and Other Guidance.—The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, including regulations or guidance to prevent the avoidance or abuse of the purposes of this section, including through the use of transfer pricing arrangements.”.
(b) Clerical Amendment.—The table of section for part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
“Sec. 280I. Outsourcing payments.”.
(c) Effective Date.—The amendments made by this section shall apply to payments made after December 31, 2025, in taxable years ending after such date. <all>
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