Bring Entrepreneurial Advancements To Consumers Here In North America Act
- Bill Number
- H.R. 2652
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-04-03: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-05-09T17:35:13Z
AI-Generated Summary
Purpose
The legislation, titled the "Bring Entrepreneurial Advancements To Consumers Here In North America Act" (H.R. 2652), aims to encourage U.S. manufacturing by providing tax incentives for companies relocating production from foreign countries to the United States. It also seeks to make permanent a tax benefit allowing businesses to fully deduct the cost of certain investments immediately, rather than over several years.
Key Provisions
- Incentives for Relocating Manufacturing (Section 2):
- Offers accelerated depreciation (a faster tax deduction for the cost of buildings and structures) for "qualified nonresidential real property," such as factories or warehouses, acquired when a company relocates manufacturing to the U.S. This treats the property as having a 20-year recovery period (instead of the usual 39 years) and allows "bonus depreciation" (an upfront deduction of a large portion of the cost).
- Excludes from taxable income any capital gains (profits from selling assets) on property sold or exchanged as part of the relocation, if the property was used in foreign manufacturing operations.
- Defines key terms:
- Qualified manufacturer: Any business that produces tangible goods (like machinery or equipment).
- Qualified relocation: Moving production of substantially identical products from abroad to the U.S., with at least equivalent production capacity (measured in units produced). The physical equipment doesn't need to be moved, as long as output increases in the U.S. by at least as much as it decreases abroad.
- Applies to U.S. possessions (e.g., Puerto Rico) as part of the "United States."
- Effective for property placed in service, sales, or exchanges after the bill's enactment.
- Permanent Full Expensing (Section 3):
- Makes "bonus depreciation" permanent at 100% for qualified property (e.g., machinery, equipment, and certain plants) placed in service after September 27, 2017. This allows businesses to deduct the full cost in the year of purchase, rather than spreading it over time.
- Includes technical updates to related tax code sections to align with this change, such as adjusting rules for long-term contracts and recovery periods.
- Effective retroactively, as if part of the 2017 Tax Cuts and Jobs Act.
Significant Changes to Existing Law
- Modifies Section 168 of the Internal Revenue Code (governing depreciation) by adding a new subsection for relocation incentives, shortening the depreciation timeline for qualifying U.S. real estate from 39 years to 20 years and enabling full bonus depreciation.
- Inserts a new Section 139J to exclude gains from selling foreign manufacturing assets during relocation, which is not currently available under existing law.
- Permanently sets bonus depreciation at 100% under Section 168(k), reversing the scheduled phase-down (which would reduce it to 0% by 2027). Previously, this was temporary, starting at 100% in 2018 and declining annually.
- These changes build on but expand the 2017 Tax Cuts and Jobs Act, removing expiration dates and adding relocation-specific rules.
Potential Impacts
- On Government Agencies: The Internal Revenue Service (IRS) would need to administer new definitions and verification processes for relocations, potentially increasing compliance workload but boosting tax revenue over time through expanded U.S. manufacturing and jobs.
- On Citizens: Could create or preserve manufacturing jobs in the U.S., benefiting workers in industrial areas, but might raise costs for consumers if companies pass on tax savings or if supply chains shift.
- On International Relations: Encourages "reshoring" of manufacturing, which could strain trade ties with countries losing production (e.g., China or Mexico) and align with U.S. policies to reduce reliance on foreign supply chains, potentially affecting global trade balances.
Main Stakeholders Affected
- Businesses: Primarily manufacturers (qualified manufacturers) relocating or investing in U.S. facilities, who gain tax savings on depreciation, asset sales, and equipment purchases.
- Workers and Communities: U.S. employees and regions with manufacturing hubs, who may see job growth from relocations.
- Taxpayers: All U.S. taxpayers, as the incentives reduce federal tax revenue (estimated billions in forgone revenue) but aim to stimulate economic activity.
- Foreign Entities: Overseas manufacturers and governments, who could lose investment and production to the U.S.
Notable Legal, Constitutional, or Political Implications
- Legal: Introduces specific criteria for "qualified relocations" (e.g., equivalent production capacity), which could lead to IRS audits or disputes over compliance. No direct challenges to existing treaties, but it may interact with international trade agreements like USMCA.
- Constitutional: Aligns with Congress's taxing and spending powers under Article I; no apparent First Amendment or due process issues, as it provides voluntary incentives rather than mandates.
- Political: Supports pro-domestic manufacturing agendas (e.g., "America First" policies), potentially bipartisan appeal in job-creation focus, but could face criticism for favoring large corporations or distorting free markets through targeted tax breaks. As an introduced bill in the 119th Congress (2025), its passage would depend on committee approval and broader tax reform debates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-04-03: Referred to the House Committee on Ways and Means.
- 2025-04-03: Introduced in House
- 2025-04-03: Introduced in House
Bill Versions
- Bring Entrepreneurial Advancements To Consumers Here In North America Act — issued 2025-04-03 — PDF (8 pages)