HIRE Act
Sen. Moreno Introduces HIRE Act to Impose 25% Tax on Outsourced Services
Stalled
No legislative action in over 90 days.
Legislative Progress
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.
Impact Analysis
Personal Impact
Life & Work
Small businesses that outsource any services to foreign workers or companies — such as customer service, IT support, web development, or accounting — would face a new 25% excise tax on those payments. On top of that, they could no longer deduct those payments as business expenses, effectively doubling the financial hit. For small businesses operating on thin margins, this could significantly raise costs or force them to find more expensive domestic alternatives.
Programs
Milestones
Read twice and referred to the Committee on Finance.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
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 articles
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.
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.
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.
Source Information
Document Type
Congressional Bill
Official Title
HIRE Act
Data Sources
Sponsor
Analysis generated by AI. Always verify with official sources.