A lobbying coalition seeking a tax holiday for repatriatingoffshore profits ended its campaign amid bipartisan congressionalreluctance after spending more than a year and $760,000 on theeffort.

The Win America Campaign, which included Cisco Systems Inc.,Microsoft Corp. and Apple Inc., ended its relationship with two ofits three lobbying firms in March, according to forms filed withthe U.S. Senate last week. The coalition “temporarily suspended”lobbying on the issue, said Jennifer Dunn, a spokeswoman for Cisco.The company still considers repatriation and a tax-code overhaul tobe top priorities, she said.

“We believe both are critical to leveling the playing field forAmerican businesses as they compete overseas and to creating aboost for the U.S. economy,” Dunn said in a statementyesterday.

The technology-heavy group of multinational corporations thatbacked the repatriation holiday tried to use its lobbying muscleand support from lawmakers in both parties to win a tax break. Theeffort fizzled as some Republicans focused on permanent tax policyand Democrats warned of the potential revenue loss.

The group wanted Congress to reprise a 2004 tax holiday that letcompanies bring home offshore profits at a discount. Critics,including the Obama administration, said the proposal would costthe government money, encourage companies to move profits offshoreand undermine efforts to overhaul the U.S. tax code.

Prospects for the legislation weren't promising, contributing tothe group's decision to end operations, said a lobbyist who workedon the effort and wouldn't discuss the decision publicly.

At one point last year, the repatriation effort looked“unstoppable” in Congress, said Steve Wamhoff, legislative directorof Citizens for Tax Justice, a Washington group that opposed theproposal.

“This is a great sign for anyone who cares about tax fairness,”he said. “A lot of people have figured out that this is a proposalthat really would offer the greatest benefits to some of the worstabusers of the corporate tax system, the companies that are reallyshifting their profits to tax havens.”

Doug Thornell, who had been a spokesman for the campaign,declined to comment.

Under current law, companies can defer U.S. taxation of profitsearned outside the country until they bring the money back. Then,they must pay corporate taxes of as much as 35 percent minus taxcredits for payments to foreign governments.

Overseas Profits

U.S. companies have stockpiled more than $1 trillion in untaxedprofits outside the country. Seventy companies with the most moneyoutside the U.S. held a total of $1.2 trillion overseas, accordingto data compiled by Bloomberg last month. Those companies increasedtheir offshore holdings by 18.4 percent over the past year.

Other companies involved in the effort included Duke EnergyCorp., Google Inc. and Pfizer Inc.

The companies maintain that a repatriation holiday — like oneenacted in 2004 that allowed profits to return to the U.S. at a5.25 percent tax rate — would inject money into the U.S. economy.Representative Kevin Brady, a Texas Republican, sponsored a billthat would have repeated the 2004 holiday.

The Joint Committee on Taxation, the nonpartisan scorekeeper oftax bills for Congress, estimated that the repatriation proposalwould cost the government $78.7 billion in tax revenue over adecade, because companies would stockpile profits outside the U.S.in anticipation of another tax holiday.

The repatriation effort ran into resistance in part because themoney held outside the U.S. was seen in Congress as a way to helpfinance an overhaul of the tax code, the lobbyist said.

Dave Camp, chairman of the House Ways and Means Committee,proposed an overhaul of the international tax system that would endmost taxation of overseas profits. It would require companies topay taxes on their untaxed offshore balances as if they werebrought home and taxed at a 5.25 percent rate.

Camp, a Michigan Republican, didn't endorse a stand-alonerepatriation holiday bill.

Brady and others tried to insert a tax holiday proposal in ameasure extending the payroll tax cut at the end of 2011. HouseRepublican leaders chose not to include it.

The bill is H.R. 1834.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.