Sponsors (2)
The bill accelerates and extends generous tax deductions and relocation incentives to encourage investment and U.S. manufacturing, delivering near-term tax relief to many businesses but shrinking federal revenues, tilting benefits toward capital-intensive firms, and adding administrative complexity.
Many businesses (including small businesses) can immediately deduct 100% of qualifying business property costs when placed in service, lowering taxable income and reducing tax bills in the year of purchase.
Manufacturers that relocate production to the U.S. can treat qualifying real property as 20-year property, accelerating cost recovery and lowering taxable income in early years for relocating manufacturers.
Manufacturers relocating from abroad can exclude gain on the sale of foreign manufacturing assets used in the relocation, reducing tax on proceeds and improving cash flow for those companies.
All taxpayers face higher federal budget deficits or the likelihood of future spending cuts or tax increases because making bonus depreciation permanent and other accelerated deductions reduce federal revenue.
Smaller or less-capitalized firms and average taxpayers may be disadvantaged because the accelerated deductions disproportionately benefit capital-intensive or larger businesses, reducing the progressivity of the tax code.
Taxpayers and the IRS could face increased administrative and compliance costs because of complex eligibility rules (e.g., production-matching and substantially identical product tests) and retroactive changes that may require amended returns and reopened audits.
Based on analysis of 3 sections of legislative text.
Makes 100% bonus depreciation permanent and creates tax depreciation and gain-exclusion incentives to encourage relocation of manufacturing to the U.S.
Introduced April 3, 2025 by Charles Roy · Last progress April 3, 2025
Creates tax incentives to encourage manufacturers to relocate production to the United States and makes 100% bonus depreciation permanent. It (1) allows faster depreciation and bonus depreciation for certain U.S. nonresidential property used in approved relocations, (2) excludes gain from sale of certain foreign relocation property when tied to an approved relocation, and (3) permanently sets the bonus depreciation rate at 100% for property placed in service after Sept 27, 2017 (with conforming edits).