Sponsor
Nathaniel Moran
Representative · R-TX
Representative · R-TX
The bill trades reduced taxpayer-subsidized support for foreign adversary-linked technology and strengthened national security incentives for higher tax costs, more compliance burden, and potential adverse effects on investment and benign technologies for affected businesses.
Taxpayers and U.S. technology users: the bill reduces tax incentives for technology tied to foreign adversaries, discouraging acquisition and use of adversary-controlled ICT and lowering U.S. dependence on potentially risky foreign technology.
Taxpayers and the federal budget: denying bonus depreciation, R&E expensing, and R&D credits for attributable items reduces taxpayer-subsidized support for foreign-controlled technology and can preserve federal revenue.
Taxpayers and businesses: requiring Treasury to define attributable items and issue implementing regulations creates a pathway to clearer rules and stronger enforcement over time.
Businesses that acquire or develop covered technology: will lose bonus depreciation, R&E expensing, and R&D credits, raising after-tax costs and potentially reducing investment, hiring, and competitiveness.
Taxpayers, financial institutions, and businesses: new definitions and Treasury rulemaking will create compliance costs and planning uncertainty as firms determine whether products are covered or interoperable.
Companies with foreign partners and investors: excluding related income/deductions from ATI and denying credits may deter cross-border investment, complicate transactions, and chill international collaboration.
Based on analysis of 2 sections of legislative text.
Adds foreign-adversary-controlled technology to the Code's foreign-influenced entity rules and denies bonus depreciation, certain R&E expensing, and the R&D credit for covered taxpayers.
Official title: To amend the Internal Revenue Code of 1986 to deny certain tax credits and deductions to businesses that use foreign adversary-controlled technology, and for other purposes.
Introduced February 11, 2026 by Nathaniel Moran · Last progress February 11, 2026
Makes companies that buy, use, develop, or are owned by entities tied to "foreign adversary-controlled technology" ineligible for a range of federal tax benefits. It adds that use of such technology to the definition of foreign-influenced entities in the Internal Revenue Code and denies bonus depreciation, certain R&E expense treatment, the R&D tax credit, and other tax advantages for affected taxpayers and property. The changes apply to taxable years beginning more than one year after enactment and give Treasury authority to issue implementing regulations.