In general The term business taxable income means gross active income reduced by the deductions specified in subsection (d). (2) Gross active income (A) In general For purposes of paragraph (1), the term gross active income means gross receipts from— (i) the sale or exchange of property or services in the United States by any person in connection with a business activity, and (ii) the export of property or services from the United States in connection with a business activity. (B) Exchanges For purposes of this section, the amount treated as gross receipts from the exchange of property or services is the fair market value of the property or services received, plus any money received. (C) Coordination with special rules for financial services, etc Except as provided in subsection (e)— (i) the term property does not include money or any financial instrument, and (ii) the term services does not include financial services. (3) Exemption from tax for activities of governmental entities and tax-exempt organizations For purposes of this section, the term business activity does not include any activity of a governmental entity or of any other organization which is exempt from tax under this chapter. (d) Deductions (1) In general The deductions specified in this subsection are— (A) the cost of business inputs for the business activity, (B) wages (as defined in section 3121(a) without regard to paragraph (1) thereof) which are paid in cash for services performed in the United States as an employee, and (C) retirement contributions to or under any plan or arrangement which makes retirement distributions (as defined in section 60A(d)) for the benefit of such employees to the extent such contributions are allowed as a deduction under section 404. (2) Business inputs (A) In general For purposes of paragraph (1), the term cost of business inputs means— (i) the amount paid for property sold or used in connection with a business activity, (ii) the amount paid for services (other than for the services of employees, including