H.R. 5776: Efficiency Gains through Grading Standards And Viable Enhancement Act of 2025

The bill titled "Efficiency Gains through Grading Standards And Viable Enhancement Act of 2025" proposes to introduce a tax credit aimed at supporting commercial egg hatcheries in improving their operational efficiency. Below is a detailed summary of the key aspects of the bill:

Purpose of the Bill

The primary objective of the bill is to provide a tax credit for investments made in specific types of equipment designed to enhance layers' operational efficiency within egg hatchery facilities.

Tax Credit Details

• The tax credit is specifically for "layer operation efficiency equipment".
• The credit amount is based on an applicable percentage of qualified equipment expenditures incurred by the taxpayer.

Applicable Percentage of the Credit

The bill sets forth the following applicable percentages for the tax credit based on when the equipment is placed in service:

• 50% for equipment placed in service during the calendar year 2026.
• 40% for equipment placed in service during the calendar year 2027.
• 30% for equipment placed in service during the calendar year 2028.

Qualified Equipment Expenditures

Qualified equipment expenditures include costs associated with:

• The purchase of qualified in-ovo sex identification equipment.
• The installation of such equipment.
• Facility modifications necessary for the operation of the equipment.

Qualified In-Ovo Sex Identification Equipment

This equipment must meet specific criteria, including:

• Utilizing optical or non-optical technology to determine the sex of avian embryos before they hatch.
• Being installed at a commercial egg hatchery located in the United States.
• Achieving an accuracy rate of no less than 95% in determining the sex of the embryos.
• Meeting any additional requirements set by the Secretary of the Treasury.

Regulations and Compliance

The bill outlines that:

• The basis of the property for which the tax credit is claimed will be adjusted. Specifically, if a credit is obtained, the basis of that property will be reduced by the credit amount.
• There are regulations regarding the recapture of the tax credit if the property no longer qualifies for the credit.
• No credit will be allowed for equipment predominantly used outside the United States.

Termination of the Credit

The provisions of the tax credit will not apply to any equipment placed in service after December 31, 2028.

Effective Date

The amendments proposed in this bill will apply to property placed in service after December 31, 2025, for taxable years ending after this date.

Relevant Companies

• None found