Sponsor
Carol Devine Miller
Representative · R-WV
The bill provides targeted, sizable tax breaks to qualifying domestic pass‑through manufacturers to encourage onshoring and investment, at the cost of reduced federal revenue, added compliance complexity, and benefits that are likely concentrated among business owners rather than broadly shared with workers.
Qualifying domestic pass-through manufacturers (small-business owners) receive a larger QBI deduction (30% rate and 100% wage/owner limitation), directly lowering their federal tax burden and increasing after-tax profits.
Manufacturers that attribute ≥20% of COGS to U.S. labor/overhead get stronger tax incentives to onshore production, likely encouraging U.S. manufacturing activity and preserving/creating jobs in affected communities.
Increased tax advantages make domestic manufacturing pass-throughs more attractive to investors, which can boost capital investment and support longer-term job growth in those sectors.
Expanding deductions for qualifying businesses reduces federal tax revenue, which could increase deficits or require cuts to federal programs.
The bulk of the benefit is likely to accrue to higher‑income pass-through owners rather than rank‑and‑file workers, concentrating gains among business owners.
The new definitions, allocation rules, and required Treasury regulations create added complexity and compliance costs for taxpayers and administrative burden for the IRS.
Based on analysis of 2 sections of legislative text.
Boosts the QBI deduction to 30% and raises the wage/owner limit to 100% for taxpayers meeting new domestic manufacturing tests tied to U.S. labor in COGS.
Official title: To amend the Internal Revenue Code of 1986 to enhance the qualified business income deduction for domestic manufacturers, and for other purposes.
Introduced May 12, 2026 by Carol Devine Miller · Last progress May 12, 2026
Creates a targeted tax preference that boosts the qualified business income (QBI) deduction for businesses that qualify as "qualified domestic manufacturers." It raises the QBI deduction rate from 20% to 30% for those taxpayers, increases the wage/owner limit from 50% to 100% for computing the deduction, defines criteria tying qualification to U.S. labor and overhead in cost of goods sold, and directs Treasury to write implementing regulations. Changes apply to tax years beginning after December 31, 2025.
Representative · R-WV