American Business for American Companies Act of 2026
House Bill Would Ban Federal Contracts for Companies That Move Overseas to Dodge U.S. Taxes
Legislative Progress
Key Points
- This bill stops the federal government from giving contracts to 'inverted' corporations. These are companies that move their legal headquarters to a foreign country to pay lower taxes while keeping most of their business operations or ownership in the United States.
- The rule applies to both civilian and defense contracts. It also prevents large contractors from hiring these overseas-based companies as subcontractors for more than 10% of a project's value if the total contract is worth more than $10 million.
- A company is considered 'inverted' if it moved abroad after May 2014 and its former U.S. owners still hold more than 50% of the stock, or if its top management and at least 25% of its employees, assets, or income are still tied to the United States.
- The goal is to ensure that businesses receiving U.S. taxpayer money are fully committed to the American economy and are not using legal loopholes to avoid paying their fair share of U.S. taxes.
- Government agencies can only bypass this rule if they prove it is necessary for national security or to run public health programs. If they use this waiver, they must explain their decision to Congress within 14 days.
- Companies that violate these rules could face serious consequences, including having their current contracts canceled or being banned from winning any future government work.
Impact Analysis
Personal Impact
Federal contracting officers and procurement staff across civilian and defense agencies would need to implement new screening procedures to identify inverted domestic corporations before awarding contracts. This adds workload and complexity to an already detailed acquisition process, though it does not change their pay, benefits, or job security. The Treasury Department would also need to write new regulations for determining management and control.
Milestones
Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
3 articlesDemocrats Introduce Measure to Ban Federal Contracts for Inverted Corporations
Democratic lawmakers on February 9 reintroduced the American Business for American Companies Act, which would permanently bar federal agencies from awarding contracts to 'inverted' corporations that shift their legal headquarters abroad to avoid U.S. taxes.
Durbin, Reed, Delauro Introduce American Business For American Companies Act
U.S. Senate Democratic Whip Dick Durbin, Senator Jack Reed, and Rep. Rosa DeLauro reintroduced legislation to extend the ban on federal contracts for inverted corporations by moving it into permanent law and closing loopholes used by companies to move tax addresses overseas.
New Bill: Senator Richard J. Durbin introduces S. 3811: American Business for American Companies Act of 2026
The bill establishes a prohibition against federal contracts being awarded to inverted domestic corporations, defined as foreign entities that have undergone a corporate inversion after May 8, 2014. It also regulates subcontracts for projects over $10 million.
Source Information
Document Type
Congressional Bill
Official Title
American Business for American Companies Act of 2026
Data Sources
Sponsor
Analysis generated by AI. Always verify with official sources.