The House of Representatives on July 28 approved a semiconductor manufacturing and economic competitiveness package that includes an investment tax credit for chip factories and equipment. The bill, which was previously approved by the Senate, now goes to President Joe Biden, who is expected to sign it.
The CHIPS and Science Act of 2022 (H.R. 4346), includes more than $52 billion for U.S. companies producing computer chips, as well as a tax credit for investment in chip manufacturing. The bipartisan measure was approved by a vote of 243 to 187.
The tax provision creates a 25% credit for investments in semiconductor manufacturing and includes incentives for production of chips as well as for manufacturing the specialized tooling equipment required to make chips. Taxpayers may elect to treat the credit as a payment against tax, or direct pay. The credit is provided for property that’s placed in service after December 31, 2022, and for which construction begins before January 1, 2027.
“Our domestic manufacturing has lagged, but with this bill, we will reinvigorate our chip production nationwide” House Ways and Means Chair Richard Neal, a Massachusetts Democrat. said before the vote. “Through sensible tax credits, we will incentivize further research and development.”
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