Retreaded Tire Jobs, Supply Chain Security and Sustainability Act of 2025
This bill, the Retreaded Tire Jobs, Supply Chain Security and Sustainability Act of 2025, would create a new tax credit to encourage the use of retreaded tires and require federal agencies to favor retreaded tires in their procurement when available. It adds a new nonrefundable business credit (the retreaded tire credit) to the Internal Revenue Code, with a sunset for tires placed in service after 2028. It also directs federal agencies to consider retreaded tires and to update procurement rules (FAR) within a year to reflect this preference. The overall aim is to boost domestic retreading, support jobs, bolster supply chain resilience, and promote sustainability by increasing demand for retreaded tires produced in the United States. Under the credit, businesses can claim a portion of their qualified retreading expenses for tires placed in service in 2026–2028, with the amount capped by a per-tire rule. To be eligible, tires must be retreaded and purchased in the United States. If the retreaded tires meet these conditions and are placed in service during the eligible years, a business can reduce its tax liability (as part of the general business credit) up to the defined limit.
Key Points
- 1Establishes a new federal tax credit: Sec. 45BB, the Retreaded Tire Credit, as part of the general business credit.
- 2Credit calculation: For each taxpayer, the credit equals the sum of per-tire credits for qualified retreaded tires placed in service in the year. The per-tire amount is the lesser of:
- 3- 30% of the amount paid or incurred to purchase qualified retreaded tires placed in service that year, or
- 4- $30 multiplied by the number of qualified retreaded tires placed in service that year.
- 5Qualified retreaded tires: Must be retreaded in the United States and purchased in the United States.
- 6Effective period: Applies to tires placed in service after December 31, 2025, with a sunset for tires placed in service after December 31, 2028.
- 7Federal procurement requirement: Agencies must, when a retreaded tire is available on the General Services Administration (GSA) tire schedule in the desired size/load/tread designation, order the retreaded tire rather than a new tire.
- 8Regulatory implementation: The Federal Acquisition Regulation (FAR) must be updated within one year of enactment to implement these requirements.
- 9Sunset and scope: The credit expires for tires placed in service after 2028; the procurement requirement is contingent on availability on the GSA schedule.