Sponsors (5)
Official title: Amend the Internal Revenue Code of 1986 to support the national defense and economic security of the United States by supporting vessels, ports, and shipyards of the United States and the United States maritime workforce through tax policy.
Introduced April 30, 2025 by Mark Edward Kelly · Last progress April 30, 2025
The bill directs large, targeted tax incentives and financing flexibilities to shore up U.S. shipbuilding, ports, and maritime readiness — benefiting domestic shipyards, vessel owners, and certain communities — at the cost of substantial federal revenue, narrower eligibility that concentrates benefits, and added administrative and compliance complexity.
Shipowners and U.S. shipyards gain large new tax incentives (a refundable/transferable ~33% tax credit for qualifying U.S. construction/repowering/reconstruction plus related eligibility rules) that lower project costs, boost domestic shipbuilding demand, and strengthen availability of U.S.-flag vessels for national emergencies.
U.S. shipyards and repair firms can claim a 25% investment tax credit (with payment/transfer election options), encouraging capital investment, supporting domestic jobs, and improving the domestic industrial base for maritime manufacturing and suppliers.
Owners/operators of qualifying vessels pay reduced federal fuel excise taxes for trade to/from U.S. Atlantic or Pacific ports, lowering operating fuel costs for maritime operators and likely reducing some shipping costs for businesses that rely on those routes.
Federal revenues will fall materially because of multiple large tax credits, exclusions, and preferences in the bill, increasing the deficit pressure or requiring offsets/cuts elsewhere.
Benefits are concentrated to firms that meet strict U.S.-domicile, ownership, insurance, classification, or NAICS-code requirements (and to larger operators able to meet complex tests), leaving many smaller, foreign-owned, or non‑qualifying operators excluded and concentrating industry advantage.
The bill creates substantial new administrative, compliance, and monitoring burdens for Treasury/IRS and for businesses (eligibility verification, nominations/certifications, recapture tracking, and new reporting), increasing government and private-sector costs.
Based on analysis of 20 sections of legislative text.
Creates vessel and shipyard investment tax credits, maritime opportunity-zone designations, income exclusions for certain maritime payments, and broadens/domestic-qualifies vessel and capital fund rules to boost U.S. maritime industrial capacity.
Creates new tax incentives and regulatory changes to support U.S. commercial shipbuilding, shipyards, ports, and maritime operations. The bill adds investment tax credits for building or rebuilding vessels and for shipyard facilities, designates limited “maritime prosperity” opportunity zones, excludes certain maritime security and student incentive payments from taxable income, and narrows/clarifies qualifying rules for U.S.-flag and U.S.-owned foreign-flag vessels and capital construction funds. The package targets onshore vessel construction and repair, port/site designation, domestic shipyard investment, and operational rules that aim to strengthen the U.S. merchant marine and related industrial base — with most tax credits and changes effective for property or activity after Dec. 31, 2025 and some provisions limited by time or numeric caps.