Sponsors
The bill encourages reshoring by letting businesses immediately expense relocation costs (reducing near-term taxes) while attempting to offset revenue loss with tariff-based transfers, but it shifts fiscal risk to the Treasury, adds compliance complexity, and may disproportionately benefit firms that can afford relocation.
Businesses that move inventory, equipment, or supplies from China to the U.S. can immediately deduct those relocation costs in the year paid, improving cash flow and lowering near-term tax bills to incentivize reshoring.
Taxpayers overall are partially protected from the deduction's budgetary impact because tariff-equivalent receipts are used to backfill a Treasury trust fund, offsetting some revenue loss to the General Fund.
Qualifying taxpayers will face targeted relief because regulations limiting the deduction to bona fide business moving expenses aim to reduce improper claims and focus benefits on genuine relocations.
All taxpayers could face increased budgetary pressure because allowing immediate expensing reduces General Fund tax receipts in the deduction year, especially if tariff-equivalent transfers are insufficient or delayed.
Taxpayers and small businesses face revenue- and timing-risk because tying offsets to tariffs on Chinese goods makes available funding dependent on volatile trade flows and tariff collections that may not match deduction timing or amount.
Small businesses and less-capitalized firms may be disadvantaged because the tax advantage for reshoring primarily benefits firms that can afford large relocation costs, potentially favoring larger firms.
Based on analysis of 2 sections of legislative text.
Allows immediate tax-year expensing of costs to move business inventory, equipment, and supplies from China to the U.S., funded by tariff-equivalent transfers into a Treasury trust fund to offset revenue loss.
Introduced January 16, 2025 by Mark E. Green · Last progress January 16, 2025
Allows U.S. businesses to immediately deduct (expense) the costs of moving inventory, equipment, and supplies used in their trade or business from China to the United States in the year those costs are paid. The Treasury Secretary must issue rules defining eligible moving expenses and the law establishes a Treasury trust fund that receives amounts equal to tariffs on Chinese-made goods to offset the revenue loss from the tax deduction, with monthly transfers and later adjustments like existing Treasury transfer rules.