American Business for American Companies Act of 2026
Senate Bill Would Ban Tax-Dodging "Inverted" Companies From Federal Contracts
Legislative Progress
Key Points
- This bill stops the federal government from giving contracts to "inverted" companies. These are businesses that move their legal address to a foreign country, often to pay lower taxes, even though they still do most of their business or have most of their owners in the United States.
- The rule would apply to both regular government agencies and the Department of Defense. It also prevents large contractors from hiring these overseas-based companies as major subcontractors on projects worth more than $10 million.
- A company is considered "inverted" if more than 50% of its stock is still held by the original American owners or if its top bosses are still based in the U.S. and at least 25% of its employees, assets, or income are tied to America.
- Government leaders could only ignore this rule if it is necessary for national security or to keep important health programs running. If they do grant a waiver, they must tell Congress within 14 days.
- Companies that break these rules could have their government contracts canceled and might be banned from doing business with the government in the future.
Impact Analysis
Personal Impact
Federal procurement officers and contracting officials would need to implement new screening processes to determine whether potential contractors qualify as inverted domestic corporations. This adds administrative burden but also clarifies rules around which companies can receive government contracts, giving procurement staff clearer guidance.
Milestones
Read twice and referred to the Committee on Homeland Security and Governmental Affairs. (text: CR S535-537)
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 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 and colleagues reintroduced legislation to extend the ban on federal contracts for inverted corporations by moving it into permanent law and closing loopholes used by dozens of companies to move tax addresses overseas.
Durbin, Others, Introduce Bill To Stop Tax Dodging Schemes
Alongside the American Business for American Companies Act, lawmakers introduced the Stop Corporate Inversions Act of 2026 to treat combined foreign corporations as domestic if they are still managed in the U.S. or if former U.S. owners hold more than 50 percent of the stock.
Source Information
Document Type
Congressional Bill
Official Title
American Business for American Companies Act of 2026
Data Sources
Sponsor
Cosponsors
(4)Analysis generated by AI. Always verify with official sources.