“To amend the Internal Revenue Code of 1986 to add qualified semiconductor design expenditures to the advanced manufacturing investment credit.”
No CRS summary available for this bill.
This section expands the advanced manufacturing investment credit under Section 48D(a) to provide eligible taxpayers a tax credit equal to 25% of qualified semiconductor design expenditures paid or incurred during the taxable year, in addition to the existing 25% credit for qualified investments in advanced manufacturing facilities (primarily semiconductors). It defines qualified semiconductor design expenditures as the sum of (1) in-house expenses (i.e., wages for qualified services, supplies, and computer use rights) and (2) contract expenses (i.e., 100% of amounts paid to non-employees), all for qualified semiconductor design conducted in the United States (including possessions). Qualified semiconductor design involves developing (or directing development of) product designs, specifications, trade secrets, technology, or other intellectual property for semiconductor manufacturing, where substantially all activities constitute experimentation to improve function, performance, reliability, or quality (excluding style/cosmetic factors, post-commercial production design except for firmware/software/manufacturing processes, product duplication, or routine surveys/testing). A special rule treats startups as satisfying the trade or business requirement for in-house expenses if principally for use in a future trade or business of the taxpayer or related parties.