100 S T A T. 2540
P U B L I C L A W 9 9 - 5 1 4 — O C T. 22, 1986
SEC. 1213. SOURCE RULE FOR SPACE AND CERTAIN OCEAN ACTIVITIES.
(a) GENERAL RULE.—Section 863 (relating to items not specified in section 861 or 862) is amended by adding a t the end thereof the following new subsections: "(d) SOURCE RULES FOR S P A C E AND CERTAIN O C E A N ACTIVITIES.—
"(1) IN GENERAL.—Except a s provided in regulations, any income derived from a space or ocean activity— "(A) if derived by a United States person, shall be sourced in the United States, and "(B) if derived by a person other than a United States person, shall be sourced outside the United States. "(2)
SPACE
OR OCEAN
ACTIVITY.—For
purposes
of
para-
g r a p h (D— "(A) IN GENERAL.—The term 'space or ocean activity' vj^, means— ,r "(i) any activity conducted in space, and '^^. "(ii) any activity conducted on or under w a t e r not r within the jurisdiction (as recognized by the United , \i States) of a foreign country, possession of the United States, or the United States. I Such term includes any activity conducted in Antarctica. "(B) EXCEPTION FOR CERTAIN ACTIVITIES.—The term 'space
*
^
•' '"'
or ocean activity' shall not include— "(i) any activity giving rise to transportation income (as defined in section 863(c)), ^ "(ii) any activity giving rise to international commu.'^ ^ nications income (as defined in subsection (e)(2)), and ' "(iii) any activity with respect to mines, oil and gas wells, or other n a t u r a l deposits to the extent within the United States or any foreign country or possession of the United States (as defined in section 638). For purposes of applying section 638, the jurisdiction of any foreign country shall not include any jurisdiction not recognized by the United States.
"(e) INTERNATIONAL COMMUNICATIONS I N C O M E. — "(1) SOURCE RULES.— ' "(A) UNITED STATES PERSONS.—In the case of any United
States person, 50 percent of any international communications income shall be sourced in the United States and 50 percent of such income shall be sourced outside the United States. "(B) FOREIGN PERSONS.—
"(i) IN GENERAL.—Except as provided in regulations or clause (ii), in the case of any person other than a United States person, any international communications income shall be sourced outside the United States. "(ii) SPECIAL RULE FOR INCOME ATTRIBUTABLE TO OFFICE OR F IX E D PLACE OF BUSINESS IN THE UNITED
STATES.—In the case of any person (other than a United States person) w h o m a i n t a i n s a n office or other fixed place of business in the United States, any international communications income a t t r i b u t a b l e to such
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office or other fixed place of business shall be sourced in the United States. "(2) DEFINITION.—For purposes of this section, the term 'international communications income' includes all income derived
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