This bill adds two tax credits to the Internal Revenue Code to encourage domestic infant formula manufacturing. One is an investment credit (called section 48F) worth 30% of qualifying investment in new or upgraded facilities that manufacture infant formula in the United States. The other is a production credit (called section 45BB) that pays $2 per pound for eligible infant formula a qualifying taxpayer manufactures and sells for use in the United States, subject to limits.
The investment credit is for "eligible taxpayers" with global revenue under $750,000,000 in the prior calendar year. Projects must be certified by the Secretary through a new program. Applicants must certify that at least 50% of formula made with the credited equipment will be sold for use in the United States during the first year the project is in service. The program has per-project and aggregate caps and timing limits. The bill includes recapture rules if project conditions are not met. The investment credit can be transferred or claimed as an elective payment under specified sections.
The production credit applies to qualifying taxpayers with prior-year revenue under $750,000,000 or taxpayers who previously received the credit. The credit is limited to 18,000,000 pounds of eligible formula per taxpayer per year and can be claimed for up to five taxable years beginning with the first year the taxpayer receives the credit. Production at facilities that received the investment credit cannot also be counted for the production credit. The production credit can be transferred and may be elected as a payment.
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