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Qualified Production Activities Income (QPAI)

What is 'Qualified Production Activities Income - QPAI'

Income derived from domestic production that qualifies for reduced taxation. More specifically, qualified production activities income is the difference between the manufacturer's domestic gross receipts and aggregate cost of goods and services related to producing the domestic goods. This reduced tax is intended to reward manufacturers for producing goods domestically instead of overseas.

Explaining 'Qualified Production Activities Income - QPAI'

The IRS mandates that any domestic manufacturer of goods can exclude 6% of all income derived from goods production from income taxation in 2008 and 2009. The tax-free rate for QPAI increases to 9% in 2010.

This type of income does not include revenue generated from the restaurant industry, electricity or natural gas production or real estate transactions.


Further Reading


The Effect of corporate taxation on investment and financial policy: evidence from the DPAD
www.aeaweb.org [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

Notice 2005-14 Provides Important Guidance on New Code Sec. 199 Deduction for Qualified Production ActivitiesNotice 2005-14 Provides Important Guidance on New Code Sec. 199 Deduction for Qualified Production Activities
heinonline.org [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

The business investment response to the Domestic Production Activities DeductionThe business investment response to the Domestic Production Activities Deduction
www.jstor.org [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

What the Jobs Act Could Mean for Transfer PricingWhat the Jobs Act Could Mean for Transfer Pricing
heinonline.org [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

Maximizing the Section 199 Deduction: Starting This Year, the Domestic Manufacturing Deduction Increases to 9% of Income from Eligible ActivitiesMaximizing the Section 199 Deduction: Starting This Year, the Domestic Manufacturing Deduction Increases to 9% of Income from Eligible Activities
www.questia.com [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

Which Companies Use the Domestic Production Activities Deduction?Which Companies Use the Domestic Production Activities Deduction?
papers.ssrn.com [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

The effect of the domestic production activities deduction on corporate payout behaviorThe effect of the domestic production activities deduction on corporate payout behavior
papers.ssrn.com [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …

Application of the Domestic Production Activities Tax Deduction (Relating to a Wide Range of Industries)Application of the Domestic Production Activities Tax Deduction (Relating to a Wide Range of Industries)
clutejournals.com [PDF]
… The new federal deduction for “Qualified Production Activities Income” is broad in its scope and therefore costly … by the taxpayers; does not conform for gross receipts from other qualifying production property including … or lower share of taxable income is likely to be eligible for the …


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