ONSHORE Manufacturing Act
Sponsored By: Senator Blackburn, Marsha [R-TN]
Introduced
Summary
This bill would create three new _domestic medical manufacturing tax credits_ to push drug, device, and related equipment production back to the United States. It would also require annual reports to Congress on credit use, Buy American procurement, and any drug or device shortages starting in 2027.
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- Manufacturers and drug makers would be eligible for a domestic medical and drug manufacturing income credit equal to 10.5 percent of qualified manufacturing income. The credit would be capped at 50 percent of W-2 wages that are allocable to those domestic activities and properly reported.
- Companies that buy or place advanced manufacturing equipment in service could claim an investment credit that peaks at 30 percent for equipment placed before 2031 and phases down to 10 percent by 2032. A separate credit covers pollution control and compliance equipment that meets Clean Air or Clean Water Act standards and uses the same phased rates.
- Multiple agencies must report annually beginning in 2027. The IRS will report credit use and VA, DoD, and FDA will report on Buy American procurement and any shortages linked to these credits, to help Congress track supply chain effects.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
Tax credit for domestic drug makers
If enacted, businesses that make specified drugs, devices, APIs, or covered countermeasures in the U.S. would be able to claim a new tax credit equal to 10.5% of the lesser of their qualified medical and drug manufacturing income or their taxable income (individuals would substitute adjusted gross income). The credit each year would be limited to no more than 50% of the taxpayer's W-2 wages. W-2 wages must be properly allocable to domestic manufacturing receipts and reported to the Social Security Administration within 60 days after the tax return due date (including extensions). The credit would apply for taxable years beginning after December 31, 2026 and includes special rules for partnerships, S corporations, trusts, estates, and affiliated groups.
Tax credit for medical equipment
If enacted, businesses that place qualifying advanced medical manufacturing equipment in service in the United States would be able to claim an investment tax credit equal to a percentage of the equipment's basis. The credit would be 30% for equipment placed in service before January 1, 2031, 20% for equipment placed in 2031, and 10% for equipment placed in 2032 (0% after 2032). Separately, depreciable property used to meet Clean Air Act or Clean Water Act standards for medical manufacturing would be eligible for the same 30/20/10 schedule, but not if it already qualifies as the advanced-equipment credit. The Secretary (after consulting HHS) would identify qualifying equipment and may issue regulations to prevent abuse.
Big company tax rule for credits
If enacted, the bill would require that the new domestic manufacturing credit and the two investment credits be included in base erosion and anti-abuse tax calculations for large and multinational firms. The change for the domestic manufacturing credit would apply for taxable years beginning after December 31, 2026, and the investment-credit changes would apply under rules similar to existing investment credit timing. This could raise or lower base erosion tax liabilities depending on each firm's situation.
Annual federal reports on credits
If enacted, four agencies would send yearly reports to Congress starting with calendar year 2027. The IRS would report on who used the new credits and how much was claimed. The VA and DoD would report on how the credits affect Buy American procurement of domestically made drugs and devices. The FDA would report on whether the credits affect drug or device shortages.
Sponsors & CoSponsors
Sponsor
Blackburn, Marsha [R-TN]
TN • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov