What does Preamble of S 2976 do?

This bill, formally titled 'To amend the Internal Revenue Code of 1986 to impose an excise tax on payments by United States taxpayers to foreign persons for services provided to United States consumers, and for other purposes,' aims to modify the Internal Revenue Code of 1986.

What does SHORT TITLE. of S 2976 do?

This bill is formally titled the Halting International Relocation of Employment Act.

What does OUTSOURCING EXCISE TAX. of S 2976 do?

This section amends the Internal Revenue Code of 1986 by adding Chapter 50B, titled 'Outsourcing'. It imposes a 25 percent tax on 'outsourcing payments' made by United States persons to foreign persons for labor or services benefiting consumers in the United States. An 'outsourcing payment' is defined as a premium, fee, royalty, service charge, or other payment meeting specific criteria related to trade or business, foreign persons, and consumer location. The amount treated as an outsourcing payment is limited if services benefit consumers both within and outside the United States, calculated as a fraction. The Secretary is authorized to prescribe regulations to prevent avoidance of the tax, including addressing related parties and transfer pricing. Section 275(a)(6) of the Internal Revenue Code is amended to include reference to Chapter 50B. The Secretary may require reporting of outsourcing payments, including certification under penalty of perjury. Penalties for failure to pay tax under Chapter 50B are increased to 50 percent. The economic substance doctrine applies to payments described in section 5000E(b). The amendments apply to payments made after December 31, 2025.

What does DOMESTIC WORKFORCE FUND. of S 2976 do?

This section establishes a Domestic Workforce Fund within the Treasury of the United States. The Fund will consist of amounts appropriated, credited, or paid into it as specified in the section and section 9602(b). Amounts equivalent to taxes imposed under section 5000E, related penalties under section 6051(a), and penalties under part II of chapter 68 relating to the Halting International Relocation of Employment Act will be transferred to the Fund. Funds will be available without further appropriation for workforce development and retraining programs administered by the Department of Labor. The Fund can also be used for apprenticeship programs, industry partnerships to expand domestic employment, and grants to States for workforce development initiatives in communities experiencing job displacement.

What does DENIAL OF INCOME TAX DEDUCTION ON OUTSOURCING PAYMENTS. of S 2976 do?

This section amends the Internal Revenue Code of 1986 by adding section 280I. Section 280I disallows income tax deductions for outsourcing payments, as defined in section 5000E(b). A clerical amendment updates the table of sections in part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 to include section 280I. The changes apply to payments made after December 31, 2025, in taxable years ending after that date.

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HIRE Act — S. 2976

Last updated: 10/6/2025 · Introduced: 10/6/2025

Author: Bernie Moreno (R-OH)

TL;DR (AI)

This bill imposes a 25% excise tax on payments made by U.S. entities to foreign entities for services benefiting U.S. consumers.
It establishes a Domestic Workforce Fund, financed by the excise tax revenue and related penalties, to support workforce development, retraining, and apprenticeship programs.
The bill disallows U.S. taxpayers from deducting outsourcing payments from their income taxes.

119th Congressin committeeHR. 6524(In Committee)Official page

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Includes provisions on preamble, short title., and 3 more.

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