Sponsor
Bernardo Moreno
Senator · R-OH
Senator · R-OH
The bill raises new revenue and creates a dedicated trust to fund workforce retraining and discourage offshoring, but it does so by increasing taxes, reducing deduction flexibility, and adding compliance burdens and potential funding/oversight risks that fall on businesses and taxpayers.
Federal government and taxpayers: Establishes a new excise tax on certain payments to foreign persons that will raise federal revenue beginning in 2026.
Displaced workers and states: Directs receipts into a dedicated trust that provides grants, retraining, and apprenticeship funding—creating a predictable stream to support workforce transition in communities hit by job displacement.
Taxpayers and domestic workers: By denying deductions for certain outsourcing payments, the bill creates an incentive to onshore work that could increase domestic economic activity and job opportunities.
U.S. businesses and payers (including small businesses and government contractors): Increases tax liability on covered payments (excise tax and nondeductibility), raising operating costs and effective federal tax bills.
Businesses, financial institutions, and corporate officers: Imposes significant new compliance, reporting, and certification requirements (with penalties for false statements), increasing administrative costs and legal exposure.
Consumers and workers: Higher tax costs for firms that outsource may be passed through as higher prices, reduced hiring, or compressed wages, harming households and employees.
Based on analysis of 4 sections of legislative text.
Creates an excise tax and denies deductions for certain outsourcing payments and directs proceeds to a Domestic Workforce Fund for retraining and State grants.
Official title: Amend the Internal Revenue Code of 1986 to impose an excise tax on payments by United States taxpayers to foreign persons for services provided to United States consumers, and for other purposes.
Introduced October 6, 2025 by Bernardo Moreno · Last progress October 6, 2025
Imposes a new excise tax on certain payments made to foreign persons for outsourced services and denies a federal tax deduction for those payments. The bill also creates a dedicated "Domestic Workforce Fund" in the Treasury to receive the new tax receipts, penalties, and related amounts and uses them for Department of Labor workforce development, retraining, apprenticeship, and State grants targeted to communities with high job displacement.