H.R. 2008: Infant Formula Made in America Act of 2025

This bill, known as the Infant Formula Made in America Act of 2025, aims to encourage the domestic production of infant formula in the United States by providing tax credits to manufacturers. Here are the key components of the bill:

Domestic Infant Formula Manufacturing Investment Credit

• The bill establishes a tax credit for certain investments in domestic infant formula manufacturing projects. This credit would allow eligible taxpayers to claim 30% of their qualified investments in these projects as a tax credit.
• Qualified investments include the purchase of equipment necessary for the manufacturing of eligible infant formula, which must be installed and used in the U.S.
• To qualify for the credit, a taxpayer's global revenue must not exceed $750 million in the previous year. Related entities under common control will be combined for this revenue test.
• Manufacturers must apply for certification from the Secretary of the Treasury to be eligible for the credit, demonstrating that at least 50% of the formula produced will be for use in the United States.
• The bill places limitations on the total amount of credit that can be allocated, capping it at $750 million and limiting individual projects to a maximum of $150 million in credit allocations.
• Credits can be transferred or redeemed for cash through an elective payment option, improving cash flow for manufacturers.
• Should there be a failure to adhere to the certification requirements, a recapture provision would increase the tax liability, reflecting any credits used previously under this act.

Infant Formula Production Credit

• The bill introduces a separate tax credit for the production of eligible infant formula, allowing qualified taxpayers to claim $2 for every pound of eligible infant formula sold for use in the United States, up to 18 million pounds per year.
• Similar to the investment credit, eligible taxpayers must have a global revenue cap of $750 million, and certain aggregation rules apply for this limit.
• No production credit can be claimed for a taxable year if the taxpayer received a credit in any of the previous five taxable years, ensuring that the credit is used to promote new production rather than recycle existing credits.
• Credits for production can be transferable, allowing more flexibility in managing financial resources.

Additional Provisions

• The bill mandates the Secretary of the Treasury to develop regulations to implement the credit programs and to conduct a review of the credits every four years.
• It includes provisions for public disclosure of the allocation of credits, ensuring transparency in how the credits are awarded and to whom.
• There are stipulations for establishing limits and rules for joint ownership and partnerships among eligible taxpayers to maintain integrity in the crediting process.

Effective Date

The changes implemented by this bill will apply to projects that begin construction after the bill becomes law.

Relevant Companies

• PRGO - Perrigo Company plc: A major player in the infant formula market that stands to gain from the investment and production tax credits encouraging domestic manufacturing.
• ELUS - Else Nutrition Holdings Inc.: A company specializing in plant-based infant formulas which could benefit from the incentives to ramp up U.S. production.