HONOR Act in plain language
1: Short title
This section would give the Act a short title: the Hindering Oppressive Nations from Obtaining Revenue Act, or the HONOR Act.
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1. Short title This Act may be cited as the Hindering Oppressive Nations from Obtaining Revenue Act or HONOR Act .
2: Denial of foreign tax credit with respect to the Russian Federation
This section would deny the foreign tax credit for income, war profits, and excess profits taxes paid or accrued to the Russian Federation, using the same credit-denial rule the tax code already applies to other listed countries under section 901(j) of the Internal Revenue Code. That denial would apply only during a defined window: starting 30 days after this Act's enactment and ending on the date the United States resumes normal, column 1 tariff treatment for Russian products under section 4(b) of the Suspending Normal Trade Relations with Russia and Belarus Act. The section would also take away the income tax deduction that the tax code otherwise allows for taxes paid to a listed country, so a taxpayer could not deduct those Russian taxes either; this deduction denial would apply to taxes paid or accrued, including taxes treated as paid or accrued under section 960 of the Internal Revenue Code, after the date that is 90 days after this Act's enactment. Except for that later start date on the deduction denial, the changes made by this section would take effect on the date this Act is enacted. The section states that it and the changes it makes apply without regard to any treaty obligation of the United States, so an existing tax treaty could not be used to avoid these rules.
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2. Denial of foreign tax credit with respect to the Russian Federation (a) In general Section 901(j)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) Special rule for Russia (i) In general This subsection shall apply to the Russian Federation during the period described in clause (ii). (ii) Period of application The period described in this clause with respect to any country is the period— (I) beginning on the date that is 30 days after the date of the enactment of this subparagraph, and (II) ending on the date on which the resumption of the application of the rates of duty set forth in column 1 of the Harmonized Tariff Schedule of the United States to products of that country takes effect pursuant to section 4(b) of the Suspending Normal Trade Relations with Russia and Belarus Act. . (b) Deduction denied Section 901(j)(3) of such Code is amended by adding at the end the following new sentence: The preceding sentence shall not apply to any tax of any country to which paragraph (2)(C) applies. . (c) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Deduction limitation The amendment made by subsection (b) shall apply to taxes paid or accrued (or deemed paid or accrued under section 960 of the Internal Revenue Code of 1986) after the date that is 90 days after the date of the enactment of this Act. (3) Nonapplication of treaty rules This section and the amendments made by this section shall be applied without regard to any treaty obligation of the United States.