What This Bill Does
This bill changes tax rules to encourage manufacturers to move their operations from foreign countries to the United States. It does this by offering tax breaks on buildings and equipment used in manufacturing, and by letting companies avoid paying taxes on profits when they sell old equipment used overseas. The bill also makes a permanent change to how quickly businesses can deduct the cost of new equipment from their taxes.
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Who It Affects
- Companies that manufacture physical products
- Companies that move manufacturing from foreign countries to the United States
- Businesses that sell equipment or property used in foreign manufacturing operations
- US property owners and builders who work with relocating manufacturers
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Key Provisions
- Companies relocating manufacturing from foreign countries to the United States can deduct the cost of buildings and equipment over 20 years instead of the normal longer timeframe, and can apply bonus depreciation (a tax tool that lets businesses deduct costs faster) to these properties (Sec. 2(a))
- Manufacturers do not have to pay taxes on profits when they sell property that was used to manufacture products in foreign countries, if that sale is connected to moving manufacturing to the United States (Sec. 2(b))
- All businesses can deduct 100 percent of the cost of new equipment and property placed in service after a specific date, instead of deducting only a percentage of the cost (Sec. 3(a))
- A "qualified relocation" requires that a company manufacture substantially identical products in the United States and that production increases in the United States by at least as many units as production decreases in the foreign country (Sec. 2(a))
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What Changes
If this bill becomes law, manufacturers moving production from overseas will get faster tax deductions on buildings and equipment. Companies will no longer owe federal income taxes on profits from selling old manufacturing equipment or property used overseas during a relocation. All businesses will be able to immediately deduct the full cost of new equipment from their taxes instead of spreading deductions over multiple years.
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Important Definitions
- **Qualified manufacturer:** Any person or business involved in making physical products
- **Qualified relocation of manufacturing:** Moving the production of physical products from a foreign country to the United States, with no requirement to physically move equipment
- **Qualified nonresidential real property:** Buildings used by relocating manufacturers placed in service in the United States
- **Qualified relocation disposition property:** Equipment or property sold by a manufacturer that was used to make products in a foreign country before the relocation
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Effective Date
The tax deductions for buildings and equipment apply to property placed in service after the bill becomes law (Sec. 2(c)(1)). The tax break for selling old equipment applies to sales and exchanges after the bill becomes law (Sec. 2(c)(2)). The change to allow full equipment deductions takes effect retroactively as if it were part of a previous tax law from 2017 (Sec. 3(c)).
I
118TH CONGRESS
1ST SESSION
H. R. 947
To amend the Internal Revenue Code of 1986 to provide incentives for
relocating manufacturing to the United States, permanent full expensing
for qualified property, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 9, 2023
Mr. ROY (for himself, Mr. BISHOP of North Carolina, Mr. GOSAR, and Mr.
BABIN) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
incentives for relocating manufacturing to the United
States, permanent full expensing for qualified property,
and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Bring Entrepreneurial
4
Advancements To Consumers Here In North America
5
Act’’.
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•HR 947 IH
SEC. 2. TAX INCENTIVES FOR RELOCATING MANUFAC-
1
TURING TO THE UNITED STATES.
2
(a) ACCELERATED DEPRECIATION
FOR NONRESI-
3
DENTIAL REAL PROPERTY.—Section 168 of the Internal
4
Revenue Code of 1986 is amended by adding at the end
5
the following new subsection:
6
‘‘(n) ACCELERATED DEPRECIATION FOR NONRESI-
7
DENTIAL REAL PROPERTY ACQUIRED IN CONNECTION
8
WITH THE RELOCATION OF MANUFACTURING TO THE
9
UNITED STATES.—
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‘‘(1) TREATMENT AS 20-YEAR PROPERTY.—For
11
purposes of this section, qualified nonresidential real
12
property shall be treated as 20-year property.
13
‘‘(2) APPLICATION OF BONUS DEPRECIATION.—
14
For application of bonus depreciation to qualified
15
nonresidential real property, see subsection (k).
16
‘‘(3) QUALIFIED NONRESIDENTIAL REAL PROP-
17
ERTY.—For purposes of this subsection, the term
18
‘qualified nonresidential real property’ means non-
19
residential real property placed in service in the
20
United States by a qualified manufacturer if such
21
property is acquired by such qualified manufacturer
22
in connection with a qualified relocation of manufac-
23
turing.
24
‘‘(4) QUALIFIED
MANUFACTURER.—For pur-
25
poses of this subsection, the term ‘qualified manu-
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•HR 947 IH
facturer’ means any person engaged in the trade or
1
business of manufacturing any tangible personal
2
property.
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‘‘(5) QUALIFIED
RELOCATION
OF
MANUFAC-
4
TURING.—For purposes of this subsection—
5
‘‘(A) IN
GENERAL.—The term ‘qualified
6
relocation of manufacturing’ means, with re-
7
spect to any qualified manufacturer, the reloca-
8
tion of the manufacturing of any tangible per-
9
sonal property from a foreign country to the
10
United States.
11
‘‘(B) RELOCATION OF PROPERTY NOT RE-
12
QUIRED.—For purposes of subparagraph (A),
13
manufacturing shall not fail to be treated as re-
14
located merely because property used in such
15
manufacturing was not relocated.
16
‘‘(C) RELOCATION
OF
NOT
LESS
THAN
17
EQUIVALENT
PRODUCTIVE
CAPACITY
RE-
18
QUIRED.—For purposes of subparagraph (A),
19
manufacturing shall not be treated as relocated
20
unless the property manufactured in the United
21
States is substantially identical to the property
22
previously manufactured in a foreign country
23
and the increase in the units of production of
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such property in the United States by the quali-
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•HR 947 IH
fied manufacturer is not less than the reduction
1
in the units of production of such property in
2
such foreign country by such qualified manufac-
3
turer.
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‘‘(6) APPLICATION
TO
POSSESSIONS
OF
THE
5
UNITED STATES.—For purposes of this subsection,
6
the term ‘United States’ includes any possession of
7
the United States.’’.
8
(b) EXCLUSION OF GAIN ON DISPOSITION OF PROP-
9
ERTY IN CONNECTION WITH QUALIFIED RELOCATION OF
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MANUFACTURING.—
11
(1) IN GENERAL.—Part III of subchapter B of
12
chapter 1 of such Code is amended by inserting
13
after section 139I the following new section:
14
‘‘SEC. 139J. EXCLUSION OF GAIN ON DISPOSITION OF PROP-
15
ERTY IN CONNECTION WITH QUALIFIED RE-
16
LOCATION OF MANUFACTURING.
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‘‘(a) IN GENERAL.—In the case of a qualified manu-
18
facturer, gross income shall not include gain from the sale
19
or exchange of qualified relocation disposition property.
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‘‘(b) QUALIFIED RELOCATION DISPOSITION PROP-
21
ERTY.—For purposes of this section, the term ‘qualified
22
relocation disposition property’ means any property
23
which—
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•HR 947 IH
‘‘(1) is sold or exchanged by a qualified manu-
1
facturer in connection with a qualified relocation of
2
manufacturing, and
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‘‘(2) was used by such qualified manufacturer
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in the trade or business of manufacturing any tan-
5
gible personal property in the foreign country from
6
which such manufacturing is being relocated.
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‘‘(c) OTHER TERMS.—Terms used in this section
8
which are also used in subsection (n) of section 168 shall
9
have the same meaning when used in this section as when
10
used in such subsection.’’.
11
(2) CLERICAL AMENDMENT.—The table of sec-
12
tions for part III of subchapter B of chapter 1 of
13
such Code is amended by inserting after the item re-
14
lating to section 139I the following new item:
15
‘‘Sec. 139J. Exclusion of gain on disposition of property in connection with
qualified relocation of manufacturing.’’.
(c) EFFECTIVE DATES.—
16
(1)
ACCELERATED
DEPRECIATION.—The
17
amendment made by subsection (a) shall apply to
18
property placed in service after the date of the en-
19
actment of this Act.
20
(2) EXCLUSION
OF
GAIN.—The amendments
21
made by subsection (b) shall apply to sales and ex-
22
changes after the date of the enactment of this Act.
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•HR 947 IH
SEC. 3. PERMANENT FULL EXPENSING FOR QUALIFIED
1
PROPERTY.
2
(a) IN GENERAL.—Paragraph (6) of section 168(k)
3
of the Internal Revenue Code of 1986 is amended to read
4
as follows:
5
‘‘(6) APPLICABLE PERCENTAGE.—For purposes
6
of this subsection, the term ‘applicable percentage’
7
means, in the case of property placed in service (or,
8
in the case of a specified plant described in para-
9
graph (5), a plant which is planted or grafted) after
10
September 27, 2017, 100 percent.’’.
11
(b) CONFORMING AMENDMENTS.—
12
(1) Section 168(k) of the Internal Revenue
13
Code of 1986 is amended—
14
(A) in paragraph (2)—
15
(i) in subparagraph (A)—
16
(I) in clause (i)(V), by inserting
17
‘‘and’’ at the end;
18
(II) in clause (ii), by striking
19
‘‘clause (ii) of subparagraph (E),
20
and’’ and inserting ‘‘clause (i) of sub-
21
paragraph (E).’’; and
22
(III) by striking clause (iii);
23
(ii) in subparagraph (B)—
24
(I) in clause (i)—
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•HR 947 IH
(aa) by striking subclauses
1
(II) and (III); and
2
(bb) by redesignating sub-
3
clauses (IV) through (VI) as sub-
4
clauses (II) through (IV), respec-
5
tively;
6
(II) by striking clause (ii); and
7
(III) by redesignating clauses
8
(iii) and (iv) as clauses (ii) and (iii),
9
respectively;
10
(iii) in subparagraph (C)—
11
(I) in clause (i), by striking ‘‘and
12
subclauses (II) and (III) of subpara-
13
graph (B)(i)’’; and
14
(II) in clause (ii), by striking
15
‘‘subparagraph (B)(iii)’’ and inserting
16
‘‘subparagraph (B)(ii)’’; and
17
(iv) in subparagraph (E)—
18
(I) by striking clause (i); and
19
(II) by redesignating clauses (ii)
20
and (iii) as clauses (i) and (ii), respec-
21
tively; and
22
(B) in paragraph (5)(A), by striking
23
‘‘planted before January 1, 2027, or is grafted
24
before such date to a plant that has already
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•HR 947 IH
been planted,’’ and inserting ‘‘planted or graft-
1
ed’’.
2
(2) Section 460(c)(6)(B) of such Code is
3
amended by striking ‘‘which’’ and all that follows
4
through the period and inserting ‘‘which has a recov-
5
ery period of 7 years or less.’’.
6
(c) EFFECTIVE DATE.—The amendments made by
7
this section shall take effect as if included in section
8
13201 of Public Law 115–97.
9
Æ
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