Draft Text of Reconciliation Package Includes Semiconductor Tax Credit
New draft text of Congress’ Build Back Better Act budget reconciliation bill includes a tax credit to incentivize advanced semiconductor manufacturing, which would help “strengthen” U.S. supply chains, the Semiconductor Industry Association said Oct. 28. The incentive, included in the reconciliation package released by congressional Democrats Oct. 28, would create an investment tax credit of up to 25% for certain “advanced manufacturing facilities” and a tax credit for certain “eligible components.” The credit would specifically be available for “property for the manufacturing of semiconductors and semiconductor tooling equipment” that begins construction before 2027. The package hasn’t yet received a vote.
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The credit “would help keep America on top in this foundational technology and strengthen U.S. chip supply chains by boosting domestic semiconductor production and innovation,” said Bob Bruggeworth, CEO of Qorvo and 2021 SIA board chair. The tax credit was originally part of the Facilitating American-Built Semiconductors (FABS) Act introduced in June (see 2106180019). “We stand ready to work with U.S. policymakers to expand and enact the FABS Act and to fully fund the CHIPS Act to turbocharge American leadership in the game-changing technologies of today and tomorrow,” SIA President John Neuffer said (see 2110200030).