Summary#
This bill changes the federal tax credit called the advanced manufacturing investment credit (section 48D of the tax code). It expands the definition of an "advanced manufacturing facility" to include facilities that make semiconductors, semiconductor manufacturing equipment, or semiconductor materials. The bill defines two classes of semiconductor materials:
- Direct production materials that are physically incorporated into finished semiconductors (for example, substrates, thin films or layering materials, packaging substrate materials, and bonding or interconnect materials).
- Indirect production materials that are used in making, testing, inspecting, or packaging semiconductors but are not part of the finished product (for example, process chemicals, photolithography materials like photoresist, cleaning and planarization materials, testing materials, packaging process materials, wafer-handling fluids and seals, and certain process chamber materials). The Secretary of the Treasury, in consultation with the Secretary of Commerce, must publish a list of qualifying direct and indirect materials within 180 days of enactment and update it every year. Taxpayers can petition the Secretary for a determination on whether a material qualifies. The bill excludes indirect production materials that have a generic use and are mainly used outside semiconductor manufacturing. The bill also extends the credit period in section 48D from ending December 31, 2026 to ending December 31, 2031.
What it means for you#
- Companies that build or upgrade facilities for making semiconductors, semiconductor manufacturing equipment, or qualifying semiconductor materials may be able to claim the advanced manufacturing investment tax credit for property placed in service after the bill becomes law.
- The Secretary will publish guidance on which specific materials qualify; businesses can ask the Treasury for rulings about materials not yet on the list.
- The extended credit period runs through December 31, 2031 for projects whose construction begins after December 31, 2026.
Expenses#
No publicly available information on projected federal revenue effects, estimated costs, or specific credit amounts is included in the bill text provided.
Proponents' View#
The bill text states its purpose: to extend the advanced manufacturing investment credit and to include materials integral to semiconductor manufacturing. The bill requires federal agencies to define and list qualifying materials and to allow taxpayer petitions for determinations.
Opponents' View#
No publicly available information.