year, any employee— (i) whose services with respect to the employer are substantially all performed within the United States, and (ii) whose compensation from the employer for the taxable year does not exceed the dollar amount in effect under section 414(q)(1)(B)(i) with respect to the calendar year in which such taxable year begins. (D) Inflation and productivity growth adjusted average For purposes of subparagraph (B)(i)(II), the inflation and productivity growth adjusted average of compensation for any taxable year shall be determined by multiplying— (i) the average of the compensation paid by the taxpayer to or for all applicable United States employees for the taxable year, by (ii) the sum of the cost-of-living adjustment and the productivity adjustment for the taxable year. (E) Cost-of-living adjustment For purposes of subparagraph (D)(ii), the cost-of-living adjustment for any taxable year is the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting the second preceding calendar year for calendar year 1992 in subparagraph (B) thereof. (F) Productivity adjustment For purposes of subparagraph (D)(ii)— (i) In general The productivity adjustment for the taxable year is an amount (expressed as a percentage) equal to the average annual increase in the business productivity index for the period beginning with calendar year 2000 and ending with the calendar year preceding the calendar year in which the taxable year begins. (ii) Business productivity index The term business productivity index means the nonfarm business productivity index published by the Bureau of Labor Statistics as adjusted by the Secretary to account for depreciation. (G) Compensation For purposes of this subparagraph, the term compensation means, with respect to any employee, the sum of— (i) the employee’s wages on which the tax under section 3101(b) is imposed, plus (ii) any amount described in paragraph (9), (11), (12), or (14) of section 6051(a) with