Sponsors (3)
The bill offers a substantial, transferable tax credit to spur domestic shipyard investment and strengthen the maritime industrial base, but it does so at the cost of federal revenue, added compliance complexity, and potential investment-timing distortions.
U.S. shipbuilding and repair companies can claim a 25% tax credit on qualified shipyard investments, lowering their after-tax cost of capital and encouraging facility upgrades and expansion.
Smaller firms, tax-exempt entities, and those without large tax liabilities can monetize the credit because it is transferable and eligible for elective payment, improving access to capital for smaller or non-taxable project sponsors.
The bill targets support to the domestic maritime industrial base by having the Navy and Maritime Administrator help define covered facilities and critical component manufacturing, aligning investments with national maritime and defense needs.
Taxpayers who do not invest in shipyards receive no direct benefit while the credit reduces federal revenue, likely increasing the deficit or crowding out other spending priorities.
Complex eligibility rules, required regulatory guidance, and determinations of 'critical' components will raise compliance costs and create uncertainty for businesses attempting to claim the credit.
Exempting the credit from the interest-disallowance rule enables some corporations to use tax-advantaged financing more aggressively, further shrinking the corporate tax base and reducing revenue beyond the credit itself.
Based on analysis of 2 sections of legislative text.
Creates a 25% investment tax credit for qualified U.S. shipyard facilities for property placed in service before Jan 1, 2034, with transferability and elective payment rules.
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
Creates a new federal investment tax credit equal to 25% of qualified investments in U.S. shipyard facilities (with progress-expenditure rules), available for property placed in service after the bill's introduction and before January 1, 2034. The credit is added to the tax code with rules for transferability/elective payment, regulatory authority for Treasury, and several conforming amendments to related tax sections. The credit applies to U.S.-located facilities whose primary purpose is constructing or repairing commercial or military vessels, manufacturing critical vessel components (with Navy and Maritime Administration consultation), or producing equipment used to construct or repair vessels. Treasury must issue implementing regulations and the credit is excluded from a specific interest-disallowance rule in the tax code.