
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1442]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
    CHAPTER 3--WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN 
                              CORPORATIONS
 
        Subchapter A--Nonresident Aliens and Foreign Corporations
 
Sec. 1442. Withholding of tax on foreign corporations


(a) General rule

    In the case of foreign corporations subject to taxation under this 
subtitle, there shall be deducted and withheld at the source in the same 
manner and on the same items of income as is provided in section 1441 a 
tax equal to 30 percent thereof. For purposes of the preceding sentence, 
the references in section 1441(b) to sections 871(a)(1)(C) and (D) shall 
be treated as referring to sections 881(a)(3) and (4), the reference in 
section 1441(c)(1) to section 871(b)(2) shall be treated as referring to 
section 842 or section 882(a)(2), as the case may be, the reference in 
section 1441(c)(5) to section 871(a)(1)(D) shall be treated as referring 
to section 881(a)(4), the reference in section 1441(c)(8) to section 
871(a)(1)(C) shall be treated as referring to section 881(a)(3), the 
references in section 1441(c)(9) to sections 871(h) and 871(h)(3) or (4) 
shall be treated as referring to sections 881(c) and 881(c)(3) or (4), 
and the reference in section 1441(c)(10) to section 871(i)(2) shall be 
treated as referring to section 881(d).

(b) Exemption

    Subject to such terms and conditions as may be provided by 
regulations prescribed by the Secretary, subsection (a) shall not apply 
in the case of a foreign corporation engaged in trade or business within 
the United States if the Secretary determines that the requirements of 
subsection (a) impose an undue administrative burden and that the 
collection of the tax imposed by section 881 on such corporation will 
not be jeopardized by the exemption.

(c) Exception for certain possessions corporations

    For purposes of this section, the term ``foreign corporation'' does 
not include a corporation created or organized in Guam, American Samoa, 
the Northern Mariana Islands, or the Virgin Islands or under the law of 
any such possession if the requirements of subparagraphs (A), (B), and 
(C) of section 881(b)(1) are met with respect to such corporation.

(Aug. 16, 1954, ch. 736, 68A Stat. 358; Pub. L. 89-809, title I, 
Sec. 104(c), Nov. 13, 1966, 80 Stat. 1557; Pub. L. 92-178, title III, 
Sec. 313(e), Dec. 10, 1971, 85 Stat. 528; Pub. L. 92-606, Sec. 1(e)(2), 
Oct. 31, 1972, 86 Stat. 1497; Pub. L. 94-455, title XIX, 
Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98-369, div. 
A, title I, Secs. 127(e)(2), 130(b), title IV, Sec. 474(r)(29)(I), July 
18, 1984, 98 Stat. 652, 661, 845; Pub. L. 99-514, title XII, 
Sec. 1273(b)(2)(B), title XVIII, Sec. 1810(d)(3)(E), Oct. 22, 1986, 100 
Stat. 2596, 2825; Pub. L. 100-647, title I, Sec. 1012(g)(7), Nov. 10, 
1988, 102 Stat. 3501; Pub. L. 103-66, title XIII, Sec. 13237(c)(5), Aug. 
10, 1993, 107 Stat. 508.)


                               Amendments

    1993--Subsec. (a). Pub. L. 103-66 substituted ``871(h)(3) or (4)'' 
for ``871(h)(3)'' and ``881(c)(3) or (4)'' for ``881(c)(3)''.
    1988--Subsec. (a). Pub. L. 100-647 struck out ``and'' after ``to 
section 881(a)(3),'' and inserted before period at end ``, and the 
reference in section 1441(c)(10) to section 871(i)(2) shall be treated 
as referring to section 881(d)''.
    1986--Subsec. (a). Pub. L. 99-514, Sec. 1810(d)(3)(E), substituted 
``871(h)'' for ``871(h)(2)'', ``881(c)'' for ``881(c)(2)'', and 
``1441(c)(9)'' for ``1449(c)(9)''.
    Subsec. (c). Pub. L. 99-514, Sec. 1273(b)(2)(B), amended subsec. (c) 
generally, substituting reference to ``certain possessions 
corporations'' for reference to ``certain Guam and Virgin Islands 
corporations'' in heading, and in text extending ``foreign corporation'' 
exception so as to not include corporation created or organized in Guam, 
American Samoa, Northern Mariana Islands, or the Virgin Islands, and 
striking out par. (2) which declared that par. (1) not apply to tax 
imposed in Guam, and par. (3) which referred to sections 934 and 943a 
for tax imposed in Virgin Islands.
    1984--Subsec. (a). Pub. L. 98-369, Sec. 474(r)(29)(I), struck out 
``or section 1451'' after ``provided in section 1441'' and struck out 
``; except that, in the case of interest described in section 1451 
(relating to tax-free covenant bonds), the deduction and withholding 
shall be at the rate specified therein'' after ``a tax equal to 30 
percent thereof''.
    Pub. L. 98-369, Sec. 127(e)(2), struck out ``and'' after ``section 
881(a)(4),'' and inserted ``, and the references in section 1449(c)(9) 
to sections 871(h)(2) and 871(h)(3) shall be treated as referring to 
sections 881(c)(2) and 881(c)(3)''.
    Subsec. (c). Pub. L. 98-369, Sec. 130(b), substituted provision 
relating to exception for certain Guam and Virgin Islands corporations 
for provision relating to exception for Guam corporations.
    1976--Subsec. (b). Pub. L. 94-455 struck out ``or his delegate'' 
after ``Secretary'' in two places.
    1972--Subsec. (c). Pub. L. 92-606 added subsec. (c).
    1971--Subsec. (a). Pub. L. 92-178 provided that reference in section 
1441(c)(8) to section 871(a)(1)(C) shall be treated as referring to 
section 881(a)(3).
    1966--Pub. L. 89-809 limited the withholding of tax at the 30 
percent rate to items of fixed or determinable United States source 
income not effectively connected with the conduct of a trade or business 
in the United States and authorized the granting of an exemption from 
the withholding requirement in the case of a foreign corporation engaged 
in trade or business within the United States if the Secretary or his 
delegate determines that the withholding imposes an undue administrative 
burden and that the collection of the tax will not be jeopardized by the 
exemption.


                    Effective Date of 1993 Amendment

    Amendment by Pub. L. 103-66 applicable to interest received after 
Dec. 31, 1993, see section 13237(d) of Pub. L. 103-66, set out as a note 
under section 871 of this title.


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1986 Amendment

    Amendment by section 1273(b)(2)(B) of Pub. L. 99-514 applicable to 
taxable years beginning after Dec. 31, 1986, with certain exceptions and 
qualifications, see section 1277 of Pub. L. 99-514, set out as a note 
under section 931 of this title.
    Amendment by section 1810(d)(3)(E) of Pub. L. 99-514 effective, 
except as otherwise provided, as if included in the provisions of the 
Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment 
relates, see section 1881 of Pub. L. 99-514, set out as a note under 
section 48 of this title.


                    Effective Date of 1984 Amendment

    Amendment by section 127(e)(2) of Pub. L. 98-369 applicable to 
interest received after July 18, 1984, with respect to obligations 
issued after such date, in taxable years after such date, see section 
127(g)(1) of Pub. L. 98-369, set out as a note under section 871 of this 
title.
    Amendment by section 130(b) of Pub. L. 98-369 applicable to payments 
made after Mar. 1, 1984, in taxable years ending after such date, see 
section 130(d) of Pub. L. 98-369, set out as a note under section 881 of 
this title.
    Amendment by section 474(r)(29)(I) of Pub. L. 98-369 not applicable 
with respect to obligations issued before Jan. 1, 1984, see section 
475(b) of Pub. L. 98-369, set out as a note under section 33 of this 
title.


                    Effective Date of 1972 Amendment

    Section 2 of Pub. L. 92-606 provided in part that: ``The amendment 
made by section 1(e)(2) [amending this section] shall take effect on the 
day after the date of enactment of this Act [Oct. 31, 1972].''


                    Effective Date of 1971 Amendment

    Amendment by Pub. L. 92-178 applicable with respect to payments 
occurring on or after Apr. 1, 1972, see section 313(f) of Pub. L. 92-
178, set out as a note under section 871 of this title.


                    Effective Date of 1966 Amendment

    Amendment by Pub. L. 89-809 applicable with respect to taxable years 
beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89-809, set 
out as a note under section 11 of this title.


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of this 
title.


    Withholding of Tax on Nonresident Aliens and Foreign Corporations

    For provisions relating to withholding of tax on nonresident aliens 
and foreign corporations, see Pub. L. 97-248, title III, Sec. 342, Sept. 
3, 1982, 96 Stat. 635, set out as a note under section 1441 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 12, 565, 814, 860G, 881, 
884, 885, 1276, 1278, 1444, 3402, 7701 of this title.
