Congress·In Committee·S. 2976

Sen. Moreno Introduces HIRE Act to Impose 25% Tax on Outsourced Services

HIRE Act

5 months ago·View on Congress.gov

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Stalled

No legislative action in over 90 days.

Legislative Progress

Senate

House

President

Law

Key Points

This bill, called the HIRE Act, would create a new 25% tax on American businesses that pay foreign workers or companies to provide services to people in the United States. This is often called outsourcing, and the goal is to discourage companies from moving jobs overseas.
Businesses would no longer be allowed to deduct these outsourcing payments from their income taxes. This means companies would pay more in taxes both through the new 25% fee and by losing a common tax break they currently use for business expenses.
The money collected from this new tax would go into a Domestic Workforce Fund. This fund would pay for job training, apprenticeships, and programs to help Americans learn new skills, especially in areas where many jobs have been lost to other countries.
If a company fails to pay this tax, they could face much higher penalties than usual. The bill also requires company leaders to sign off on these payments under penalty of perjury to make sure they are not trying to hide outsourced work.
If passed, these rules would start on January 1, 2026. It would affect any business that uses foreign labor for things like customer service, tech support, or other services delivered to customers living in the U.S.

TaxesLabor EmploymentEconomy Finance

Impact Analysis

Personal Impact

Who is affectedScoreImpactCertaintyScopeDurationSentiment

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

Milestones

2 milestones2 actions

Oct 6, 2025Senate

Read twice and referred to the Committee on Finance.

Oct 6, 2025

Introduced in Senate

Related News

3 articles

Thomson Reuters·5 months ago

Outsourcing Bill Catches Tax Community's Attention

Senator Bernie Moreno (R-OH) proposed the HIRE Act to establish a 25% tax on 'outsourcing payments' to foreign persons for services benefiting U.S. consumers. The bill would also prohibit tax deductions for these payments, potentially creating an effective tax rate of 46% for affected companies.

Business Standard·4 months ago

US HIRE Act a bigger threat to Indian workers than H-1B fee: Decoded

The proposed HIRE Act 2025 seeks to impose a 25% tax on American companies that pay foreign workers for services used within the US. Experts warn this could strike at the heart of India's IT and BPO industries by making offshore talent significantly more expensive for U.S. firms.

C−

The Tribune·4 months ago

HIRE Act reflects growing mindset in US that white-collar jobs should not be 'lost' to India: Jairam Ramesh

Introduced by Senator Bernie Moreno, the HIRE Act proposes a 25% tax on outsourcing payments and the creation of a 'Domestic Workforce Fund' to support American apprenticeships. Indian leaders cautioned that the bill signals a protectionist shift targeting white-collar service exports.

Related Bills

1 bill

H.R. 7559Related bill

To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.

Feb 12 — Referred to the House Committee on Ways and Means.

Source Information

Document Type

Congressional Bill

Official Title

HIRE Act

Bill NumberS 2976

Congress119th Congress

ChamberSenate

Latest ActionRead twice and referred to the Committee on Finance.

Sponsor

Data Sources

Congress.gov

Official legislative information

Analysis generated by AI. Always verify with official sources.