The STAR Act of 2024 expands a federal tax credit to help companies invest in semiconductor design and development in the United States. Specifically, the bill allows companies to claim a 25 percent tax credit on qualified semiconductor design expenses, including wages for designers, computer equipment, and costs paid to contractors for design work conducted domestically. The credit covers design activities that lead to new or improved semiconductor functions, performance, or reliability, but excludes cosmetic changes, routine testing, market research, and copying existing products. The legislation affects semiconductor companies and design firms that invest in American-based design operations and begins immediately upon enactment, with the credit available for expenditures made after the bill's passage, continuing indefinitely. This initiative aims to strengthen the domestic semiconductor industry by making it more economically attractive for companies to conduct design work in the United States rather than abroad.
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