Bring Entrepreneurial Advancements To Consumers Here In North America Act
This bill, titled the Bring Entrepreneurial Advancements To Consumers Here In North America Act, would use the tax code to encourage manufacturing relocation to the United States. It does three major things: (1) offer accelerated depreciation and other tax incentives for nonresidential real property used in relocating manufacturing back to the U.S.; (2) provide a tax-free treatment (no gain) on the disposition of property involved in that relocation; and (3) make full expensing (100% deduction in the year placed in service) for qualified property a permanent feature of the tax code. The bill defines what counts as a “qualified relocation of manufacturing” and sets conditions (such as ensuring production shifts are substantial and equivalent in product type) to qualify for the incentives. It also extends these incentives to U.S. possessions (territories) and lays out when the incentives would take effect. In short, the bill aims to lower the after-tax cost of moving manufacturing operations to the United States, with the promise of quicker write-offs for facilities and equipment and no tax on gains from selling relocation-related property.
Key Points
- 1Accelerated depreciation for qualified relocation of manufacturing:
- 2- Adds a new category under 168, treating qualified nonresidential real property as 20-year property for depreciation.
- 3- Allows application of bonus depreciation to this property, with the usual bonus rules (as referenced in subsection (k)).
- 4- Applies to nonresidential real property placed in service in the U.S. by a “qualified manufacturer” in connection with a qualified relocation of manufacturing.
- 5- A “qualified relocation” means moving manufacturing from a foreign country to the U.S., with conditions that the U.S.-made product is substantially identical to the foreign product and that the increase in U.S. production is not less than the decrease abroad.
- 6- Possessions of the United States are included.
- 7Exclusion of gain on disposition of relocation-related property:
- 8- Introduces a new Sec. 139J to exclude from gross income any gain from sale or exchange of “qualified relocation disposition property.”
- 9- Qualified relocation disposition property is property sold or exchanged by a qualified manufacturer that was used in foreign manufacturing prior to relocation.
- 10- Ensures consistent definitions with the relocation depreciation provisions.
- 11- Applies to property dispositions after enactment.
- 12Permanent full expensing for qualified property:
- 13- Amends 168(k)(6) to set the applicable percentage at 100% for property placed in service after September 27, 2017 (i.e., permanent 100% expensing for qualified property).
- 14- Includes conforming changes to the 168(k) structure and related references.
- 15- Effective as if included in the TCJA (Public Law 115-97), effectively making 100% expensing permanent; property placed in service after enactment would be eligible, with retroactive implications for existing provisions.
- 16Administrative and timing notes:
- 17- Accelerated depreciation for relocation property applies to property placed in service after the bill’s enactment.
- 18- Gain exclusion on disposition applies to sales/exchanges after enactment.
- 19- The bill codifies these changes within the existing tax code framework, including clarifications with respect to possessions and related provisions.