Infant Formula Made in America Act of 2025
The Infant Formula Made in America Act of 2025 would create two new federal tax incentives to promote domestic infant formula production in the United States. First, it establishes a domestic infant formula manufacturing investment credit (section 48F) equal to 30% of the qualified investment in eligible property for a qualifying infant formula manufacturing project. This is designed to encourage companies to build, expand, or re-equip U.S. facilities to manufacture infant formula domestically. Second, it creates an infant formula production credit (section 45BB) of $2 per pound for eligible infant formula produced and sold for use in the United States, with annual and per-taxpayer limits. The bill also sets up a federal certification process for eligible projects, caps on credits, rules for transferring and financializing the credits, recapture provisions, and coordination with related tax incentives. The overall goal is to boost domestic production, reduce reliance on imports, and support U.S. infant formula supply chains. Key design features include eligibility thresholds (e.g., a revenue cap of $750 million for eligible taxpayers), a 10-year window for new-project starts, and an annual cap of $150 million per project and a total cap of $750 million for all credits under the investment credit. The production credit has an 18,000,000-pound annual limit per taxpayer and a 5-year eligibility window for claiming the credit. Credits are transferable and can be elected for cash payments, and the act specifies recapture rules if projects fail to meet certification requirements or if qualified property ceases to be eligible.
Key Points
- 1Domestic infant formula manufacturing investment credit (section 48F)
- 2- 30% credit of the qualified investment for eligible property used in a qualifying infant formula manufacturing project.
- 3- Eligible property must be necessary for manufacturing, include tangible personal property (and certain other tangible property) used as part of the facility, and be eligible for depreciation.
- 4- Eligible taxpayer defined as those with total global revenue not exceeding $750 million; affiliated entities treated as a single taxpayer.
- 5- Certification process: the Secretary must establish a program; projects must be certified to receive the credit; projects must meet at least 50% US sales of eligible formula in the first year after being placed in service.
- 6- Caps and timing: up to $150 million per project; aggregate cap of $750 million; credits for projects commencing construction no later than 10 years after enactment; 3-year window to place certified projects in service; 4-year department review period with potential redistribution of credits if undersubscribed or affected by delays.
- 7- Public disclosure of allocations; recapture provisions if criteria aren’t met or eligible property ceases to qualify.
- 8- Credit is transferable and can be used via elective cash payment; coordinated with other credits; effective for projects with construction begun after enactment.
- 9Infant formula production credit (section 45BB)
- 10- Credit equals $2 per pound of eligible infant formula produced and sold in the United States in a taxable year.
- 11- Eligible taxpayer defined similarly to 48F (revenue threshold or previous year credit eligibility).
- 12- Annual cap of 18,000,000 pounds of eligible formula per taxpayer for credit purposes; 5-year rule limiting eligibility to either the first year a credit was allowed or the next five years.
- 13- Aggregation rules treat related entities as a single taxpayer.
- 14- Formula produced at a facility with a 48F credit is not counted toward the 45BB credit to avoid double crediting the same investment.
- 15- Credit can be transferred, made transferable on tax credit platforms, and eligible for cash electable payment; included as part of the General Business Credit (section 38) for corporate tax purposes.
- 16Coordination and administration
- 17- The act provides regulatory guidance, including conversion of liquid concentrate quantities to pounds for measurement purposes.
- 18- The Secretary can issue necessary regulations and guidance, including details on measurement and transferability.
- 19- Effective date: applies to formula manufactured at facilities whose construction begins after enactment.
- 20- Clerical and table-of-sections updates accompany the statute to integrate 48F and 45BB into the Internal Revenue Code.