This bill protects a tax break that American companies use when they earn money from selling intellectual property (like patents, software, and trademarks) to foreign customers. Right now, companies can deduct 50% of their foreign-derived intangible income from their taxes, which reduces what they owe. However, this deduction was scheduled to automatically drop to 37.5% in the future. This bill stops that reduction from happening and keeps the deduction at the current 50% level indefinitely. The goal is to help American companies stay competitive globally by maintaining this tax incentive for innovation and intellectual property exports. The change takes effect immediately once the bill becomes law.

Growing and Preserving Innovation in America Act of 2025

Feenstra, Randy

Growing and Preserving Innovation in America Act of 2025This bill makes permanent the increased percentage rates at which a domestic corporation may deduct (for federal tax purposes) foreign-derived intangible income and global intangible low-taxed income (GILTI).As background, for tax years beginning after 2017 and before 2026, a domestic corporation generally is allowed a tax deduction equal to the sum of (1) 37.5% of the corporation’s foreign-derived intangible income, and (2) 50% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI. However, under current law, the tax deduction decreases starting in 2026, to the sum of (1) 21.875% of the corporation’s foreign-derived intangible income, and (2) 37.5% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI.Under the bill, for tax years beginning in 2026, a domestic corporation generally may claim a tax deduction equal to the sum of (1) 37.5% of the corporation’s foreign-derived intangible income, and (2) 50% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI.