H.R. 2871: Safeguarding U.S. Supply Chains Act

This bill, known as the Safeguarding U.S. Supply Chains Act, proposes changes to the Internal Revenue Code concerning tax credits for advanced manufacturing. Specifically, it aims to restrict the availability of production credits for components that are produced by or associated with certain foreign entities deemed to be concerning in terms of national security. Below are the key elements of the bill:

Key Provisions

• Restriction on Manufacturing Credits: The bill specifies that no tax credits will be allowed for components produced by "foreign entities of concern." This term is defined by an existing law (the William M. Mac Thornberry National Defense Authorization Act for Fiscal Year 2021).
• Focus on Battery Components: Additionally, there are provisions that specifically mention battery components. The bill asserts that any battery component produced with technology from these foreign entities will not qualify as a "qualifying battery component" for the credits.
• Effective Date: The restrictions outlined in this bill would apply to components that are produced and sold after the legislation is enacted.

In summary, the bill seeks to limit tax incentives for U.S. companies that utilize components from certain foreign sources, particularly focusing on those in the advanced manufacturing and battery technology sectors. This is part of a broader aim to secure supply chains and strengthen domestic manufacturing by encouraging the use of local resources over foreign entities that may pose national security risks.

Relevant Companies

• None found