Sponsor
Mark E. Green
Representative · R-TN
Representative · R-TN
The bill incentivizes reshoring from China by letting firms immediately expense relocation costs—reducing taxes for relocating businesses and targeting relief through regulations—but it lowers near-term federal revenues, creates revenue-timing risk tied to tariffs, adds compliance complexity, and may favor larger firms able to relocate.
Businesses that move inventory, equipment, or supplies from China to the U.S. can immediately deduct those relocation costs in the year paid, lowering their near-term taxable income and reducing short-term tax bills.
The legislation directs tariff-equivalent receipts to backfill a Treasury trust fund to offset the direct revenue loss to the General Fund from immediate expensing, reducing net federal budget impact if transfers occur as intended.
Regulatory limits that restrict the deduction to bona fide business moving expenses can help reduce improper claims and focus benefits on qualifying relocations, improving targeting and limiting abuse.
Taxpayers and the federal budget face reduced General Fund receipts in the year deductions are taken, increasing short-term budgetary pressure and potentially affecting other spending or borrowing.
Linking offsets to tariffs on Chinese goods makes the availability and timing of revenue dependent on trade flows and tariff collections, creating uncertainty that may not match deduction timing or amounts.
The deduction may disproportionately benefit firms that can afford large relocation projects, potentially disadvantaging smaller firms that cannot undertake costly moves despite the tax break.
Based on analysis of 2 sections of legislative text.
Allows immediate expensing of costs to move business inventory, equipment, and supplies from China to the U.S., funded by tariff-equivalent transfers to offset revenue loss.
Official title: To allow expensing of amounts paid to move business property from China to the United States, and for other purposes.
Introduced January 16, 2025 by Mark E. Green · Last progress January 16, 2025
Creates a temporary tax and funding program to encourage U.S. businesses to move inventory, equipment, and supplies made in China back to the United States by allowing immediate expensing of relocation costs and matching the revenue impact with tariff proceeds. The Treasury must write rules limiting the deduction to bona fide business moving costs, set up a trust that receives amounts equal to U.S. tariffs on Chinese-made goods, and transfer amounts from that trust to offset the reduction in General Fund revenue caused by the new expensing treatment.