Treaty shopping can be used to avoid paying U.S. taxes. It occurs when multinational companies located in a country without a U.S. tax treaty receive U.S. income through a subsidiary in another country that has a treaty with the U.S. to avoid paying U.S. taxes.
To prevent the avoidance, subsidiaries serving as a conduit to firms without a treaty would be subject to a withholding tax.
The bill, the James Zadroga 9/11 Health and Compensation Act of 2010, seeks to prevent treaty shopping from happening.
The provision raises approximately $7.4 billion over ten years and is aimed at treaty shopping used by multinational companies incorporated in tax haven countries.
The House in July voted on the 9/11 bill and treaty shopping under suspension of the rules, but it failed to garner the two-thirds vote needed to pass the chamber.
This time the bill will be under regular order, which means it needs a simple majority to pass. If July's vote is any indication to the level of support it will receive, it should pass. July's vote was 255-159 with some Republicans supporting the measure.