The US Treasury Department has released proposed regulations interpreting Internal Revenue Code Section 199. According to the Treasury,

The section 199 deduction relating to domestic production activities was enacted in October 2004 as part of the American Jobs Creation Act. The provision generally allows companies to deduct three percent of income from domestic production activities for 2005 and, by 2010, nine percent of such income.

The Treasury is seeking comments on the proposed regulations. According to the announcement, the proposed regulations will replace and expand the temporary guidance provided by Notice 2005-14 (PDF).

You can download the complete set of proposed regulations for Section 199 direct from the Treasury website. This is a big file: PDF format, 224 pages, 514kb.

• Section 199: Income Attributable to Domestic Production Activities Notice of Proposed Rulemaking (PDF)

Additional information about the Section 199 Deduction:

• Domestic Production Activities Deduction - essential details
• Limitations, Simplied Method, and Resources - more details
• Internal Revenue Code Section 199 - full text of the tax law from the American Jobs Creation Act of 2004