Trade Sanction Avoidance Act of 2006

H.R. 4909, the Trade Sanction Avoidance Act of 2006, seeks to eliminate specific tax breaks for U.S. exporters that were previously ruled as illegal subsidies by the World Trade Organization (WTO). The bill would immediately end the "phase-in" period and contract exemptions that allowed some corporations to continue receiving tax exclusions on income earned from foreign sales.

The practical impact of this legislation is to bring U.S. tax law into full compliance with international trade agreements to prevent foreign countries from imposing retaliatory tariffs on American goods. By removing these contested tax benefits, the bill aims to protect a wide range of U.S. industries from increased costs and trade barriers that could otherwise make American products more expensive abroad.