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Congress·In Committee·21 days ago

House Bill Would Ban Federal Contracts for Companies That Move Overseas to Dodge U.S. Taxes

Also known as: American Business for American Companies Act of 2026

Legislative Progress

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Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

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.
Economy FinanceNational Security Foreign PolicyTaxes

Milestones

2 milestones2 actions
Feb 9, 2026House

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.

Feb 9, 2026

Introduced in House

Related News

3 articles
Bloomberg Law·21 days ago

Democrats 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.

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RiverBender·19 days ago

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.

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Quiver Quantitative·5 days ago

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.

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Source Information

Document Type

Congressional Bill

Official Title

American Business for American Companies Act of 2026

Bill NumberHR 7424
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred 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.

Sponsor

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.