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Creates new tax incentives to encourage manufacturers to move production to the United States by (1) allowing faster depreciation for certain U.S. nonresidential property used in a qualified manufacturing relocation and (2) excluding gain on the sale of certain foreign manufacturing property sold in connection with a relocation. Separately, makes full (100%) bonus depreciation permanent for eligible property (including certain planted or grafted property) and adjusts related tax-code language, with those bonus-depreciation changes treated as if enacted in 2017 for tax purposes.
The bill makes bonus depreciation and other tax incentives more generous (including retroactive relief and onshoring incentives) to spur investment and manufacturing in the U.S. and territories, but does so at the cost of lower federal revenue, added administrative burden, and benefits that disproportionately favor asset owners and larger firms.
Businesses that buy qualifying property (including many corporations and small businesses) can immediately deduct 100% of the cost (bonus depreciation) for eligible assets — with a retroactive effective date allowing amended prior returns to claim larger past deductions.
Manufacturers that relocate production to the U.S. (including U.S. possessions) can depreciate qualifying buildings over 20 years, claim bonus depreciation on qualifying assets, and may exclude gain on the sale of foreign-used manufacturing assets — making onshoring more financially attractive and expanding eligible investment locations (including territories).
Farmers and agricultural businesses planting or grafting qualifying perennial plants keep immediate expensing for those plantings (no Jan 1, 2027 cutoff), preserving current tax benefits for agricultural capital investments.
The accelerated and expanded depreciation rules (including permanent full expensing and relocation-related exclusions) will reduce federal tax revenue significantly, increasing the deficit or forcing changes to other spending/tax policies.
The benefits are likely to skew toward capital owners and larger firms able to relocate or make big capital purchases, disadvantaging wage earners and smaller firms that cannot move production or make the same investments.
The changes create new administrative and compliance burdens and potential disputes — firms must document production changes to prove U.S. production increases, taxpayers may need to amend past returns because of retroactivity, and the IRS will face added processing and oversight work.
Introduced April 3, 2025 by Charles Roy · Last progress April 3, 2025