ALIGN Act

Bill Number: H.R. 574
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-01-21: Referred to the House Committee on Ways and Means.
Last Updated: 2025-12-05T21:36:03Z

AI-Generated Summary

Purpose of the Legislation

The ALIGN Act (Accelerate Long-term Investment Growth Now Act) aims to encourage business investments by making permanent a tax benefit that allows companies to fully deduct the cost of certain property purchases immediately, rather than spreading the deduction over several years. This is intended to promote long-term economic growth through accelerated investments in equipment, machinery, and other qualified assets.

Key Provisions

Permanent 100% Expensing: Amends Section 168(k) of the Internal Revenue Code (IRC) to set the "applicable percentage" for bonus depreciation at 100% for qualified property placed in service (or plants planted/grafted) after September 27, 2017. This means businesses can deduct the full cost of eligible investments in the year they are made.
Qualified Property Definition: Covers tangible property with a recovery period of 20 years or less (e.g., machinery, equipment, vehicles), certain computer software, and qualified film/TV productions. Also includes specified plants for farming.
Conforming Amendments: Updates related IRC sections to remove temporary phase-out language, simplify definitions, and align with the permanent 100% rule. For example, it eliminates references to expiring dates and adjusts rules for long-term contracts under Section 460.
Effective Date: Changes apply retroactively as if included in the 2017 Tax Cuts and Jobs Act (Public Law 115-97), affecting tax years starting after that law's enactment.

Significant Changes to Existing Law

From Temporary to Permanent: Under the 2017 Tax Cuts and Jobs Act, full (100%) expensing was temporary, phasing down to 80% in 2023, 60% in 2024, and eventually to 0% after 2026. This bill eliminates the phase-out and expiration, locking in 100% expensing indefinitely.
Simplified Rules: Removes outdated clauses related to transitional percentages and extensions, streamlining the tax code for easier compliance. For instance, it updates language for plants (removing pre-2027 limits) and contract recovery periods (now fixed at 7 years or less for certain long-term projects).
No new restrictions or expansions; focuses on permanence without altering what qualifies as "qualified property."

Potential Impacts

On Businesses and Citizens: Encourages immediate investments in capital assets, potentially lowering effective tax rates for companies and spurring job creation, innovation, and economic expansion. Individual taxpayers (e.g., business owners) may see reduced tax liabilities, increasing disposable income for reinvestment.
On Government Agencies: The IRS will administer a simpler, permanent rule, reducing the need for frequent updates or guidance on phase-outs. However, it could lead to short-term revenue losses (estimated in billions annually) as deductions are front-loaded, affecting federal budget planning.
On International Relations: Minimal direct impact, though U.S. businesses may gain a competitive edge in global markets by lowering investment costs compared to countries without similar incentives. Could indirectly influence trade by boosting domestic manufacturing.

Main Stakeholders Affected

Businesses and Corporations: Primary beneficiaries, especially in manufacturing, agriculture, construction, and tech sectors that invest heavily in depreciable assets.
Taxpayers and Investors: Small business owners, farmers, and shareholders who can claim larger upfront deductions, potentially increasing after-tax returns.
Government and Revenue Collectors: U.S. Treasury and IRS, facing reduced immediate tax collections but possible long-term gains from economic growth.
Workers and Economy: Indirectly affected through potential job growth and higher wages from stimulated investments.

Notable Legal, Constitutional, or Political Implications

Legal: Strengthens tax code stability by removing temporary provisions, reducing litigation risks over expiring benefits. Aligns with IRC's depreciation framework (Section 168) without challenging its constitutionality. Retroactive application may require IRS guidance to avoid disputes in prior tax filings.
Constitutional: No apparent issues; falls under Congress's enumerated power to levy taxes (Article I, Section 8). Does not infringe on states' rights, as it modifies federal income tax rules.
Political: Represents a pro-business tax policy extension, likely appealing to Republican-led initiatives for economic stimulus. Could spark debates on fiscal responsibility, as permanent expensing may widen budget deficits without offsetting revenue measures. Introduced by a bipartisan group but referred to the House Ways and Means Committee, signaling potential for broader tax reform discussions.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Arrington, Jodey C. [R-TX-19]

Cosponsors (34)

Rep. Estes, Ron [R-KS-4], Rep. LaHood, Darin [R-IL-16], Rep. Tenney, Claudia [R-NY-24], Rep. Hern, Kevin [R-OK-1], Rep. Buchanan, Vern [R-FL-16], Rep. Van Duyne, Beth [R-TX-24], Rep. Feenstra, Randy [R-IA-4], Rep. Miller, Carol D. [R-WV-1], Rep. Miller, Max L. [R-OH-7], Rep. Fulcher, Russ [R-ID-1], Rep. Collins, Mike [R-GA-10], Rep. Mace, Nancy [R-SC-1], Rep. Carey, Mike [R-OH-15], Rep. Kustoff, David [R-TN-8], Rep. Smucker, Lloyd [R-PA-11], Rep. Fallon, Pat [R-TX-4], Rep. Moore, Blake D. [R-UT-1], Rep. Guest, Michael [R-MS-3], Rep. Smith, Adrian [R-NE-3], Rep. Schweikert, David [R-AZ-1], Rep. Hudson, Richard [R-NC-9], Rep. Yakym, Rudy [R-IN-2], Rep. Ellzey, Jake [R-TX-6], Rep. McGuire, John [R-VA-5], Rep. Barr, Andy [R-KY-6], Rep. Kiley, Kevin [R-CA-3], Rep. Goldman, Craig [R-TX-12], Rep. Amodei, Mark E. [R-NV-2], Rep. Balderson, Troy [R-OH-12], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Miller-Meeks, Mariannette [R-IA-1], Rep. Stauber, Pete [R-MN-8], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Begich, Nicholas J. [R-AK-At Large]

Recent Actions

2025-01-21: Referred to the House Committee on Ways and Means.
2025-01-21: Introduced in House
2025-01-21: Introduced in House

Bill Versions

Accelerate Long-term Investment Growth Now Act — issued 2025-01-21 — PDF (4 pages)