S. 4750: Semiconductor Superiority Act

This bill would change a federal tax credit so it clearly applies to certain semiconductor manufacturing facilities located in outer space, including low-Earth orbit. In plain terms, it would say that space-based semiconductor manufacturing facilities can qualify for the same advanced manufacturing investment credit that applies to some advanced manufacturing property on Earth.

What the bill changes

• It amends the Internal Revenue Code to clarify how the advanced manufacturing investment credit applies to semiconductor manufacturing facilities in outer space.
• It says that property used as part of an outer-space manufacturing facility can still count as qualified property even if:
  • it is used to transport crew, goods, equipment, materials, or supplies to and from the facility in outer space, or
  • it is not physically located in outer space.
• It also says that certain activities related to manufacturing include:
  • flight control operations,
  • crew habitation in outer space,
  • repair of the facility, and
  • transporting people and materials to and from the facility.
• It defines outer space to include low-Earth orbit.
• It excludes rockets or similar launch vehicles built to send a payload from Earth into outer space from being treated as qualified property.

Other tax-rule changes

• The bill also makes related changes to another part of the tax code so that certain outer-space semiconductor manufacturing property held by a U.S. person may be treated in a specified way for tax purposes, if it was launched from within the United States.
• These changes are meant to fit outer-space manufacturing into existing tax rules rather than create a completely separate tax program.

When it would apply

• The changes would apply to property placed in service after the date the bill is enacted.
• The bill also says it should not be read as making any statement about how the credit applied to outer-space facilities before enactment.

Relevant Companies

• None found