This bill creates a new tax credit for businesses that manufacture high-performance rare earth magnets domestically. It adds a new section to the Internal Revenue Code that lets a taxpayer claim a credit based on kilograms of magnets produced and sold to an unrelated person (with an election to treat some related-party sales as unrelated). The credit pays $20 per kilogram normally, and $30 per kilogram if at least 90% by weight of the magnet's component rare earth materials are produced domestically. Credits for magnets made after 2034 are phased down to 0% after 2037.
The bill defines "rare earth magnet" by magnetic coercivity and by composition (neodymium-iron-boron or samarium-cobalt alloys, with specified associated elements). "Component rare earth material" is defined to include neodymium, praseodymium, dysprosium, terbium, samarium, gadolinium, and cobalt. "Manufactured" includes manufacturing steps such as milling, pressing, sintering, and recycling.
The credit is not allowed for a magnet if any component rare earth material used to make it is produced in a non-allied foreign nation, with a delayed application of that restriction for dysprosium, terbium, samarium, and gadolinium until January 1, 2027. The Secretary of the Treasury may require registration or information to prevent duplication or fraud. The Secretary may also treat magnets that do not meet the coercivity test as qualifying if made by an "eligible manufacturer" that has a DOE or DOD grant or contract and commits to a domestic manufacturing facility. The bill becomes part of the general business credit and applies to taxable years beginning after December 31, 2024.
No publicly available information on overall fiscal costs or revenue effects is included in the bill text. The bill itself sets the credit amounts ($20/kg or $30/kg) and a phase-out schedule but does not provide an estimate of total budgetary impact.
No publicly available information.
No publicly available information.