Sponsors (2)
The bill provides substantial, permanent tax incentives to encourage reshoring and equipment investment—boosting business cash flow and potentially jobs—while materially reducing near-term federal revenue and concentrating benefits among firms best able to use immediate deductions, with risks that weak enforcement and retroactivity could blunt the intended employment benefits and complicate tax administration.
Manufacturers and businesses that buy qualifying equipment can immediately deduct large portions of investment (bonus depreciation / 100% expensing), improving near-term cash flow and lowering taxable income in the year of purchase.
Qualified manufacturers relocating production to the U.S. can exclude gains from sales of foreign manufacturing assets when exiting foreign facilities, reducing tax costs of reshoring.
Incentivizing reshoring through these tax provisions could create U.S. manufacturing jobs and support local economies where production is established.
Near-term federal revenue will fall because of accelerated depreciation, 100% expensing, and gain exclusions, increasing deficits or crowding out other government spending.
The tax benefits disproportionately help firms that can use large immediate deductions (larger, capital-rich companies or firms with current taxable income), providing less value to smaller or loss-making businesses and raising equity concerns.
If compliance and enforcement are weak, firms could claim relocations or asset transfers without producing meaningful onshore job creation, undermining the bill's employment goals.
Based on analysis of 3 sections of legislative text.
Adds tax incentives to encourage reshoring: 20‑year recovery and bonus depreciation for certain real property, excludes gains on related foreign property sales, and permanently affirms 100% bonus expensing for short‑lived property.
Introduced April 3, 2025 by Charles Roy · Last progress April 3, 2025
Creates new tax incentives to encourage companies to move manufacturing operations to the United States. It treats certain nonresidential real property used for relocated manufacturing as 20-year property and eligible for bonus depreciation, excludes from taxable income gains on sales of property sold in connection with such relocations by qualifying sellers, and permanently confirms 100% bonus expensing for short‑lived qualified property (with a retroactive effective treatment). The bill sets definitions for which property and sellers qualify, applies the reshoring incentives to property and sales after enactment, and treats the permanent 100% bonus-expensing change as if it had been included in earlier law going back to Sept. 27, 2017, removing a dated planting cutoff for certain plants.