Sponsors (2)
The bill incentivizes domestic shipyard investment and strengthens the maritime industrial base through a generous, transferable tax credit, but does so at the cost of reduced federal revenue, added compliance complexity, and potential distortions in investment timing and financing.
Shipbuilders and ship-repair firms can claim a 25% tax credit on qualified shipyard investments, lowering their after-tax cost of capital and encouraging facility investment and job-supporting activity.
Smaller firms and tax-exempt entities can monetize the credit because it is transferable and eligible for elective payment, improving liquidity and making the benefit accessible beyond profitable, taxable corporations.
The Navy and Maritime Administrator will help define eligible facilities and critical component manufacturing, targeting support to the domestic shipbuilding and maritime industrial base and supporting national security and maritime jobs.
Taxpayers who do not invest in shipyards receive no direct benefit while the credit reduces federal revenue, potentially increasing deficits or crowding out other federal spending priorities.
Businesses face more compliance costs and uncertainty because complex eligibility rules, regulatory guidance, and determinations of 'critical' components increase administrative burden and could slow claims.
Businesses undertaking very long-term shipyard projects may be disadvantaged or rush to qualify because the credit only applies to property placed in service before 2034, potentially distorting investment timing.
Based on analysis of 2 sections of legislative text.
Establishes a 25% federal investment tax credit for qualified U.S. shipyard facility investments placed in service before Jan 1, 2034, with transferability and elective payment rules.
Creates a federal investment tax credit for U.S. shipyard facilities. The credit equals 25% of qualified investments in eligible shipyard property, is available for property placed in service after the bill’s introduction and before January 1, 2034, and includes rules for transferability and elective payment treatment. The law defines eligible shipyard facilities (commercial or military vessel construction/repair, critical component manufacturing, or equipment used to produce/repair vessels), adopts progress-expenditure rules for investments, requires Treasury regulations, and makes conforming changes across the Internal Revenue Code to add and treat the new credit alongside other business tax credits.
Official title: To amend the Internal Revenue Code of 1986 to support the national defense and economic security of the United States by incentivizing the construction of United States shipyards.
Introduced July 23, 2026 by Nathaniel Moran · Last progress July 23, 2026