Sponsors (2)
Creates a 20-year depreciation class and income-exclusion for property tied to qualified manufacturing relocations and makes 100% bonus depreciation permanent.
The bill incentivizes investment and reshoring through accelerated expensing and targeted relocation tax breaks, which can boost business cash flow and capital spending but will reduce federal revenue, add complexity, and tend to favor larger or capital‑intensive firms over smaller taxpayers.
Businesses buying qualifying tangible business property (broadly: taxpayers and firms of many sizes) can immediately deduct 100% of the cost under permanent bonus depreciation, lowering taxable income in the year property is placed in service and encouraging capital investment.
Manufacturers that relocate production to the U.S. can accelerate depreciation by treating certain real property as 20-year property, reducing early-year taxable income and improving cash flow to support reshoring investments.
Companies selling foreign manufacturing assets used in relocation can exclude gain on those sales, reducing taxes on proceeds and easing the cash flow needed to shift operations back to the U.S.
Making 100% bonus depreciation permanent and accelerating other deductions will materially reduce federal tax revenue, raising deficits or forcing future spending cuts or tax increases that affect all taxpayers.
The tax changes disproportionately benefit capital‑intensive and larger firms (including those able to relocate operations), shifting tax advantages away from smaller or non-investing businesses and reducing the progressivity of the tax code.
Complex and specific eligibility rules (e.g., substantially identical product and production‑matching tests for relocations) plus other targeted rule changes increase compliance costs and administrative burden for businesses and for the IRS/Treasury.
Based on analysis of 3 sections of legislative text.
Official title: To amend the Internal Revenue Code of 1986 to provide incentives for relocating manufacturing to the United States, permanent full expensing for qualified property, and for other purposes.
Introduced April 3, 2025 by Charles Roy · Last progress April 3, 2025
Creates permanent and new tax incentives to encourage manufacturers to move production back to the United States. It makes buildings and equipment used in qualified manufacturing relocations depreciable over 20 years and eligible for bonus depreciation, excludes certain gains on sales of property used in such relocations from gross income, and makes 100% bonus depreciation permanent for qualifying property placed in service after September 27, 2017. The changes amend the Internal Revenue Code, add definitions for qualified manufacturers and relocations, apply prospectively to property placed in service or sold after enactment, and treat the 100% bonus depreciation change as if included in the 2017 tax law for effective-date and conformity purposes.