103 STAT. 2324 PUBLIC LAW 101-239—DEC. 19, 1989 •J minimis amounts of gross receipts and qualified re- search expenses shall be disregarded under clause (i). "(C) MAXIMUM FIXED-BASE PERCENTAGE. — In no event shall the fixed-base percentage exceed 16 percent. " (D) ROUNDING.— The percentages determined under subparagraph (A) shall be rounded to the nearest 1/100th of 1 percent. " (4) CONSISTENT TREATMENT OF EXPENSES REQUIRED. — "(A) IN GENERAL.— Notwithstanding whether the period for filing a claim for credit or refund has expired for any taxable year taken into account in determining the fixed- base percentage, the qualified research expenses taken into account in computing such percentage shall be determined on a bgisis consistent with the determination of qualified research expenses for the credit year. ^ "(B) PREVENTION OF DISTORTIONS.— The Secretary may prescribe regulations to prevent distortions in calculating a taxpayer's qualified research expenses or gross receipts caused by a change in accounting methods used by such taxpayer between the current year and a year taken into account in computing such taxpayer's fixed-base percent- age. "(5) GROSS RECEIPTS.— For purposes of this subsection, gross receipts for any taxable year shall be reduced by returns and allowances made during the taxable year. In the case of a foreign corporation, there shall be taken into account only gross receipts which are effectively connected with the conduct of a trade or business within the United States." (2) CONFORMING AMENDMENTS. — (A) Subparagraph (B) of section 41(a)(l) is amended to read as follows: "(B) the base amount, and". (B) Clause (ii) of section 41(e)(7)(C) is amended by striking "base period research expenses" and inserting "base
amount. (C) Paragraph (1) of section 41(f) (relating to aggregation of expenditures) is amended by striking "proportionate share of the increase in qualified research expenses" each place it appears and inserting "proportionate shares of the ' qualified research expenses and basic research payments". (D) Subparagraph (A) of section 41(f)(3) is amended— (i) by striking "June 30, 1980" and inserting "Decem- ber 31, 1983", and (ii) by inserting before the period ", and the gross receipts of the taxpayer for such periods shall be in- creased by so much of the gross receipts of such prede- cessor with respect to the acquired trade or business as is attributable to such portion". (E) Subparagraph (B) of section 41(f)(3) is amended— (i) by striking "June 30, 1980" and inserting "Decem- ber 31, 1983", and (ii) by inserting before the period ", and the gross receipts of the taxpayer for such periods shall be de- creased by so much of the gross receipts as is attrib- utable to such portion". (F)(i) Subparagraph (C) of section 41(f)(3) is amended by striking "for the base period" and all that follows and
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