Qualified Production Activities Income - QPAI

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Domestic Production Activities ...

    A deduction against income derived from domestic manufacturing ...
  2. Earned Income

    Income derived from active participation in a trade or business, ...
  3. Outsourcing

    A practice used by different companies to reduce costs by transferring ...
  4. Production Efficiency

    1. An economic level at which the economy can no longer produce ...
  5. Factors Of Production

    An economic term to describe the inputs that are used in the ...
  6. Material Participation Test

    A set of criteria that determines whether a taxpayer is a material ...
Related Articles
  1. Globalization: Progress Or Profiteering?
    Economics

    Globalization: Progress Or Profiteering?

  2. Global Trade And The Currency Market
    Forex Education

    Global Trade And The Currency Market

  3. Give Your Taxes Some Credit
    Taxes

    Give Your Taxes Some Credit

  4. NAFTA's Winners And Losers
    Economics

    NAFTA's Winners And Losers

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center