119th (2025–2027)
H.R. 1328
Supply Chain Security and Growth Act of 2025This bill establishes a tax credit for qualified investments made in certain facilities that are located in a U.S. possession and manufacture drugs, pharmaceuticals, semiconductors, or certain other items, subject to limitations. The bill also increases the deemed-paid foreign tax credit for taxes paid to a U.S. possession.Specifically, under the bill, a taxpayer (other than a prohibited foreign entity) is allowed a tax credit for 40% of an investment in certain property that isplaced into service during the tax year;integral to the operation of a critical supply chain facility; andconstructed, reconstructed, or erected by the taxpayer, or property acquired for original used by the taxpayer.The bill defines critical supply chain facility as a facility that (1) manufactures active pharmaceutical ingredients, drugs, biologic products, medical countermeasures, medical diagnostic devices, semiconductors, semiconductor manufacturing equipment, aerospace equipment, or artificial nanomaterials; and (2) is located in Puerto Rico, Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands.Under the bill, the tax credit is transferable and may be claimed as a direct cash payment (i.e., elective payment). (Limitations apply.)Finally, the bill increases to 100% (from 80%) the deemed-paid foreign tax credit for income taxes paid or accrued by a controlled foreign corporation (CFC) to a U.S. possession. (Under current law, a U.S. shareholder of a CFC is allowed a tax credit for income taxes paid by a CFC on certain income attributable to the U.S. shareholder.)