Congress offers $40B+ tax break for chip and pharma makers—no strings attached.

What it does

This bill creates a 40% tax credit for companies that build or buy equipment for factories making critical goods—pharmaceuticals, semiconductors, aerospace parts, and medical devices—in the U.S. or Puerto Rico, but only if the company is not controlled by foreign governments or entities from adversarial nations. It also increases the tax credit for U.S. possession income taxes from 80% to 100%, benefiting companies with operations in Puerto Rico and other U.S. territories.

Why we flagged it

The bill's operative mechanism is a 40% investment tax credit—a direct reduction in corporate tax liability. While framed as supply-chain security, the credit is available to any non-foreign-controlled entity meeting the facility definition, with no performance requirement, wage guarantee, or public benefit condition. The Puerto Rico provision is a separate tax benefit unrelated to the stated supply-chain purpose.

• Section 3 increases deemed credit for taxes paid to U.S. possessions from 80% to 100%, unrelated to supply chain security and appears to benefit companies with Puerto Rico operations.

What the text implies

• The 40% credit applies to the full basis of any qualifying property, with no cap, sunset, or clawback if the facility relocates or closes, creating a permanent revenue loss.
• The 'prohibited foreign entity' definition excludes entities with 25%+ foreign ownership, but allows up to 24.9% foreign investment, potentially enabling foreign capital to benefit from the credit.
• The credit is transferable under section 6418, allowing companies to sell unused credits to other taxpayers, creating a secondary market and reducing the credit's targeting to actual manufacturers.
• No requirement that jobs created be permanent, that wages meet any standard, or that the facility remain in the U.S., limiting the public benefit from the tax expenditure.
• The Puerto Rico provision (section 3) increases the deemed credit for possession taxes from 80% to 100%, effectively subsidizing companies' Puerto Rico operations independent of supply chain policy.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill may strengthen domestic supply chains for critical goods and create manufacturing jobs, a public benefit. However, the primary mechanism is a substantial tax expenditure (foregone federal revenue) that flows to corporations, with no requirement they pass savings to consumers or workers, and the Puerto Rico provision appears to be a separate corporate tax benefit unrelated to supply chain security.

Who stands to gain

• pharmaceutical manufacturers
• semiconductor manufacturers
• aerospace equipment manufacturers
• medical device manufacturers
• companies with Puerto Rico operations

Named in the bill

Internal Revenue Code of 1986, Infrastructure Investment and Jobs Act, Federal Food, Drug, and Cosmetic Act, Public Health Service Act, Puerto Rico, U.S. possessions, qualified opportunity zones, active pharmaceutical ingredients, semiconductors, aerospace equipment, medical countermeasures

Where it stands

12 cosponsors: 7 Democrats, 5 Republicans.

• Feb 13, 2025 — Introduced · Congress.gov: “Introduced in House”
• Feb 13, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $2,490,000 in lobbying spend. A filing names 8 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Nicole Malliotakis, the sponsor, reported $1,140,250 in PAC receipts in the 2026 cycle. $6,000 of that came from 1 PAC tied to these lobbying clients.

• Abbvie Inc. — $2,490,000 on 2 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.