Final answer:
The DPAD was a tax deduction for U.S. businesses, which applied to five categories: domestic manufacturing, construction, engineering and architectural services related to construction, software development, and production of utilities, all within the U.S.
Step-by-step explanation:
The Domestic Production Activities Deduction (DPAD) was a tax deduction available to certain businesses in the United States, which was repealed after December 31, 2017. However, for historical understanding, there were five main categories of Domestic Production Gross Receipts (DPGR) that qualified for the DPAD:
- Manufacturing or production of goods within the United States.
- Construction of buildings or substantial renovation of buildings in the United States.
- Engineering and architectural services in the United States related to construction work.
- Software development performed in the United States.
- Production of electricity, natural gas, or potable water in the United States.
These categories supported the goal of the deduction, which was to incentivize and support domestic production and services.