Supply Chain Security and Growth Act of 2025

Key Points

• This bill creates a 40% investment tax credit for companies that build or upgrade manufacturing facilities in Puerto Rico and other U.S. territories. The credit applies to tangible property that is part of a critical supply chain facility placed in service after December 31, 2024.
• The tax credit covers facilities that manufacture essential goods like pharmaceuticals, biological products, medical devices, semiconductors, aerospace equipment, and artificial nanomaterials. These are all items where the U.S. currently relies heavily on foreign suppliers.
• Companies owned or controlled by adversarial foreign nations are banned from claiming the credit. Any entity where a covered nation holds 25% or more of the capital or profits, or has the power to appoint key officers, is disqualified.
• Facilities must be located in a U.S. territory or Puerto Rico to qualify. The bill also includes a special aggregation rule for affiliated groups investing in economically distressed zones with poverty rates of 30% or more.
• The credit can be received as a direct cash payment or transferred to another company, making it accessible even to businesses that do not have enough tax liability to use it directly. This mirrors the elective payment structure used in recent clean energy tax credits.
• The bill also raises the deemed credit for taxes paid to U.S. territories from 80% to 100%, further reducing the tax burden on companies manufacturing in these locations.