“To amend the Internal Revenue Code of 1986 to establish the critical supply chains reshoring investment tax credit.”
No CRS summary available for this bill.
This section establishes the short title of the Act as the “Supply Chain Security and Growth Act of 2025.”
This section establishes a new critical supply chains reshoring investment credit under section 48F of the Internal Revenue Code, equal to 40 percent of the qualified investment in a critical supply chain facility placed in service during the taxable year. As background, the credit applies to facilities primarily manufacturing active pharmaceutical ingredients, drugs, biological products, medical countermeasures, medical diagnostic devices, semiconductors or semiconductor manufacturing equipment, aerospace equipment, or artificial nanomaterials, and located in a U.S. specified possession or Puerto Rico. This section limits eligibility to a qualifying taxpayer, defined as a taxpayer that is not a prohibited foreign entity. It defines a prohibited foreign entity to include: (1) a foreign entity of concern under section 40207(a)(5) of the Infrastructure Investment and Jobs Act; (2) an entity over which the government of a covered nation has the right or power to appoint or approve a covered officer; or (3) an entity 25 percent or more owned, directly or indirectly, by a covered nation, a covered officer entity, or a citizen, national, resident, or entity organized under the laws of a covered nation. It also defines covered officer, covered nation, qualified investment, qualifying property, and critical supply chain facility, and treats members of a qualified affiliated group as a single taxpayer if at least 1 member makes a qualified investment in a critical supply chain facility located in an economically distressed zone, i.e., a qualified opportunity zone with a poverty rate of not less than 30 percent. This section coordinates the new credit with the electricity production credit under section 45 by providing that a facility is not a qualified facility for section 45 purposes if a credit is allowed under section 48F for that facility for the taxable year or any prior taxable year. It also allows elective payment treatment under section 6417 for the new credit, including by adding the section 48F credit to the list of credits eligible for elective payment and authorizing certain taxpayers to make an election to be treated as an applicable entity with respect to the credit.
This section increases the deemed foreign tax credit for tested foreign income taxes paid or accrued to a possession of the United States to 100 percent (from 80 percent) under section 960(d) of the Internal Revenue Code of 1986. (Thus, U.S. taxpayers with tested foreign income from a U.S. possession may claim a larger deemed credit for qualifying taxes paid or accrued after December 31, 2024.)