Page:United States Statutes at Large Volume 110 Part 3.djvu/97

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PUBLIC LAW 104-188—AUG. 20, 1996 110 STAT. 1827 Subtitle F—Revenue Offsets PART I—GENERAL PROVISIONS SEC. 1601. TERMINATION OF PUERTO RICO AND POSSESSION TAX CREDIT. (a) IN GENERAL. —Section 936 is amended by adding at the end the following new subsection: " (j) TERMINATION.— "(1) IN GENERAL.— Except as otherwise provided in this subsection, this section shall not apply to any taxable year beginning after December 31, 1995. " (2) TRANSITION RULES FOR ACTIVE BUSINESS INCOME CREDIT.—Except as provided in paragraph (3)— "(A) ECONOMIC ACTIVITY CREDIT.—In the case of an existing credit claimant— "(i) with respect to a possession other than Puerto Rico, and "(ii) to which subsection (a)(4)(B) does not apply, the credit determined under subsection (a)(1)(A) shall be allowed for taxable years beginning after December 31, 1995, and before January 1, 2002. " (B) SPECIAL RULE FOR REDUCED CREDIT.— "(i) IN GENERAL.—In the case of an existing credit claimant to which subsection (a)(4)(B) applies, the credit determined under subsection (a)(1)(A) shall be allowed for taxable years beginning after December 31, 1995, and before January 1, 1998. "(ii) ELECTION IRREVOCABLE AFTER 1997.— An election under subsection (a)(4)(B)(iii) which is in effect for the taxpayer's last taxable year beginning before 1997 may not be revoked unless it is revoked for the taxpayer's first taxable year beginning in 1997 and all subsequent taxable years. " (C) ECONOMIC ACTIVITY CREDIT FOR PUERTO RICO. — "For economic activity credit for Puerto Rico, see section 30A. "(3) ADDITIONAL RESTRICTED CREDIT.— "(A) IN GENERAL.—In the case of an existing credit claimant— "(i) the credit under subsection (a)(1)(A) shall be allowed for the period beginning with the first taxable year after the last taxable year to which subparagraph (A) or (B) of paragraph (2), whichever is appropriate, applied and ending with the last taxable year beginning before January 1, 2006, except that "(ii) the aggregate amount of taxable income taken into account under subsection (a)(1)(A) for any such taxable year shall not exceed the adjusted base period income of such claimant. "(B) COORDINATION WITH SUBSECTION (a)(4). — The amount of income described in subsection (a)(1)(A) which is taken into account in applying subsection (a)(4) shall be such income as reduced under this paragraph. "(4) ADJUSTED BASE PERIOD INCOME.— For purposes of paragraph (3)— 29-194O-96 -4:QL3Part3