H.R. 7509 — Deterring Adversarial Access to Americans’ Data Act

This section denies multiple tax benefits to taxpayers using foreign adversary-controlled technology—defined as information and communications technology or services (i.e., hardware, software, or related products for data processing, storage, retrieval, or communication) that is designed, developed, manufactured, or provided by specified foreign entities or foreign-influenced entities, or dependent on or interoperable with such technology for core functionality—or that are prohibited foreign entities, as follows: (1) adds entities using such technology to the list of foreign-influenced entities under IRC §7701(a)(51); (2) denies bonus depreciation under IRC §168(k) for such technology and property owned by prohibited foreign entities (thus, eligible property must not include such technology or be so owned); (3) denies full expensing of domestic research and experimental expenditures under IRC §174A for amounts paid or incurred for the acquisition or development of such technology or by prohibited foreign entities; (4) excludes items of income, gain, deduction, or loss attributable to such technology or a trade or business owned by a prohibited foreign entity from adjusted taxable income for the business interest deduction limit under IRC §163(j); and (5) denies the credit for increasing research activities under IRC §41 to specified foreign entities or foreign-influenced entities. The amendments apply to taxable years beginning after the date that is one year after enactment.