Us Congress 2025-2026 Regular Session

Us Congress House Bill HB802 Compare Versions

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Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 802
5	5	To amend the Internal Revenue Code of 1986 to add qualified semiconductor
6	6	design expenditures to the advanced manufacturing investment credit.
7	7	IN THE HOUSE OF REPRESENTATIVES
8	8	JANUARY28, 2025
9	9	Mr. M
10	10	OOREof Utah (for himself, Ms. DELBENE, Mr. MCCAUL, Ms. MATSUI,
11	11	Mr. M
12	12	OOLENAAR, Mr. KRISHNAMOORTHI, Ms. TENNEY, Mr. KHANNA,
13	13	Mr. M
14	14	ORELLE, Mr. BUCHANAN, Mr. CARSON, Mr. GOTTHEIMER, Ms. SE-
15	15	WELL, and Mr. PANETTA) introduced the following bill; which was re-
16	16	ferred to the Committee on Ways and Means
17	17	A BILL
18	18	To amend the Internal Revenue Code of 1986 to add quali-
19	19	fied semiconductor design expenditures to the advanced
20	20	manufacturing investment credit.
21	21	Be it enacted by the Senate and House of Representa-1
22	22	tives of the United States of America in Congress assembled, 2
23	23	SECTION 1. SHORT TITLE. 3
24	24	This Act may be cited as the ‘‘Semiconductor Tech-4
25	25	nology Advancement and Research Act of 2025’’ or the 5
26	26	‘‘STAR Act of 2025’’. 6
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29	29	•HR 802 IH
30	30	SEC. 2. QUALIFIED SEMICONDUCTOR DESIGN EXPENDI-1
31	31	TURES ADDED TO ADVANCED MANUFAC-2
32	32	TURING INVESTMENT CREDIT. 3
33	33	(a) I
34	34	NGENERAL.—Section 48D of the Internal Rev-4
35	35	enue Code of 1986 is amended— 5
36	36	(1) in subsection (a), by striking ‘‘an amount 6
37	37	equal to’’ and all that follows through the period and 7
38	38	inserting ‘‘, with respect to an eligible taxpayer, an 8
39	39	amount equal to the sum of— 9
40	40	‘‘(1) 25 percent of the qualified investment for 10
41	41	such taxable year with respect to any advanced man-11
42	42	ufacturing facility of such taxpayer, and 12
43	43	‘‘(2) 25 percent of the qualified semiconductor 13
44	44	design expenditures paid or incurred by such tax-14
45	45	payer during the taxable year.’’, 15
46	46	(2) by redesignating subsections (c), (d), and 16
47	47	(e) as subsections (e), (f), and (g), respectively, 17
48	48	(3) by inserting after subsection (b) the fol-18
49	49	lowing new subsections: 19
50	50	‘‘(c) Q
51	51	UALIFIEDSEMICONDUCTOR DESIGNEXPENDI-20
52	52	TURES.— 21
53	53	‘‘(1) I
54	54	N GENERAL.—For purposes of subsection 22
55	55	(a)(2), the term ‘qualified semiconductor design ex-23
56	56	penditures’ means the sum of the following amounts 24
57	57	which are paid or incurred by the taxpayer during 25
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60	60	•HR 802 IH
61	61	the taxable year in carrying on any trade or business 1
62	62	of the taxpayer for— 2
63	63	‘‘(A) in-house semiconductor design ex-3
64	64	penses for semiconductor design conducted in 4
65	65	the United States, and 5
66	66	‘‘(B) contract design expenses for semicon-6
67	67	ductor design conducted in the United States. 7
68	68	‘‘(2) I
69	69	N-HOUSE SEMICONDUCTOR DESIGN EX -8
70	70	PENSES.— 9
71	71	‘‘(A) I
72	72	N GENERAL.—The term ‘in-house 10
73	73	semiconductor design expenses’ means— 11
74	74	‘‘(i) any wages paid or incurred to an 12
75	75	employee for qualified services performed 13
76	76	by such employee, 14
77	77	‘‘(ii) any amount paid or incurred for 15
78	78	supplies used in the conduct of qualified 16
79	79	semiconductor design, and 17
80	80	‘‘(iii) under regulations prescribed by 18
81	81	the Secretary, any amount paid or in-19
82	82	curred to another person for the right to 20
83	83	use computers in the conduct of qualified 21
84	84	semiconductor design. 22
85	85	Clause (iii) shall not apply to any amount to 23
86	86	the extent that the taxpayer (or any person 24
87	87	with whom the taxpayer must aggregate ex-25
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90	90	•HR 802 IH
91	91	penditures under paragraph (7) receives or ac-1
92	92	crues any amount from any other person for 2
93	93	the right to use substantially identical personal 3
94	94	property. 4
95	95	‘‘(B) Q
96	96	UALIFIED SERVICES.—The term 5
97	97	‘qualified services’ means services consisting 6
98	98	of— 7
99	99	‘‘(i) engaging in qualified semicon-8
100	100	ductor design, or 9
101	101	‘‘(ii) engaging in the direct super-10
102	102	vision or direct support of design activities 11
103	103	which constitute qualified semiconductor 12
104	104	design. 13
105	105	If substantially all of the services performed by 14
106	106	an individual for the taxpayer during the tax-15
107	107	able year consists of services meeting the re-16
108	108	quirements of clause (i) or (ii), the term ‘‘quali-17
109	109	fied services’’ means all of the services per-18
110	110	formed by such individual for the taxpayer dur-19
111	111	ing the taxable year. 20
112	112	‘‘(C) S
113	113	UPPLIES.—The term ‘supplies’ has 21
114	114	the meaning given such term in section 22
115	115	41(b)(2)(C). 23
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118	118	•HR 802 IH
119	119	‘‘(D) WAGES.—The term ‘wages’ has the 1
120	120	meaning given such term in section 2
121	121	41(b)(2)(D). 3
122	122	‘‘(3) C
123	123	ONTRACT DESIGN EXPENSES .— 4
124	124	‘‘(A) I
125	125	N GENERAL.—The term ‘contract 5
126	126	design expenses’ means 100 percent of any 6
127	127	amount paid or incurred by the taxpayer to any 7
128	128	person (other than an employee of the tax-8
129	129	payer) for qualified semiconductor design. 9
130	130	‘‘(B) P
131	131	REPAID AMOUNTS.—If any contract 10
132	132	design expenses paid or incurred during any 11
133	133	taxable year are attributable to qualified semi-12
134	134	conductor research to be conducted after the 13
135	135	close of such taxable year, such amount shall be 14
136	136	treated as paid or incurred during the period 15
137	137	during which the qualified semiconductor design 16
138	138	is conducted. 17
139	139	‘‘(4) T
140	140	RADE OR BUSINESS REQUIREMENT DIS -18
141	141	REGARDED FOR IN -HOUSE DESIGN EXPENSES OF 19
142	142	CERTAIN STARTUP VENTURES .—In the case of in- 20
143	143	house semiconductor design expenses, a taxpayer 21
144	144	shall be treated as meeting the trade or business re-22
145	145	quirement of paragraph (1) if, at the time such in- 23
146	146	house semiconductor design expenses are paid or in-24
147	147	curred, the principal purpose of the taxpayer in 25
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150	150	•HR 802 IH
151	151	making such expenditures is to use the results of the 1
152	152	design in the active conduct of a future trade or 2
153	153	business— 3
154	154	‘‘(A) of the taxpayer, or 4
155	155	‘‘(B) of 1 or more persons who with the 5
156	156	taxpayer are treated as single taxpayer under 6
157	157	paragraph (7). 7
158	158	‘‘(5) Q
159	159	UALIFIED SEMICONDUCTOR DESIGN .— 8
160	160	‘‘(A) I
161	161	N GENERAL.—The term ‘qualified 9
162	162	semiconductor design’— 10
163	163	‘‘(i) means the development (or direc-11
164	164	tion of the development) of product design, 12
165	165	design specifications, trade secrets, tech-13
166	166	nology, or other intellectual property for 14
167	167	the purpose of semiconductor manufac-15
168	168	turing, substantially all of the activities of 16
169	169	which constitute elements of a process of 17
170	170	experimentation for a purpose described in 18
171	171	subparagraph (B)(i), and 19
172	172	‘‘(ii) does not include any activity de-20
173	173	scribed in subparagraph (B)(ii). 21
174	174	‘‘(B) P
175	175	URPOSES FOR WHICH RESEARCH 22
176	176	MAY QUALIFY FOR CREDIT .—For purposes of 23
177	177	subparagraph (A)— 24
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180	180	•HR 802 IH
181	181	‘‘(i) IN GENERAL.—Semiconductor de-1
182	182	sign shall be treated as conducted for a 2
183	183	purpose described in this paragraph if it 3
184	184	relates to— 4
185	185	‘‘(I) a new or improved function, 5
186	186	‘‘(II) performance, or 6
187	187	‘‘(III) reliability or quality. 7
188	188	‘‘(ii) C
189	189	ERTAIN PURPOSES NOT QUALI -8
190	190	FIED.—Semiconductor design shall in no 9
191	191	event be treated as conducted for a pur-10
192	192	pose described in this paragraph if it is 11
193	193	conducted for purposes of— 12
194	194	‘‘(I) style, taste, cosmetic, or 13
195	195	other design factors unrelated to a 14
196	196	purpose described in clause (i), 15
197	197	‘‘(II) design after the commence-16
198	198	ment of commercial production of the 17
199	199	semiconductor, unless such design is 18
200	200	related to firmware, software, or man-19
201	201	ufacturing process activities that 20
202	202	would otherwise meet the require-21
203	203	ments of clause (i), 22
204	204	‘‘(III) duplication of an existing 23
205	205	semiconductor product (in whole or in 24
206	206	part) from a physical examination of 25
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209	209	•HR 802 IH
210	210	the semiconductor itself or from 1
211	211	plans, blueprints, detailed specifica-2
212	212	tions, or publicly available information 3
213	213	with respect to such semiconductor, or 4
214	214	‘‘(IV) surveys or studies related 5
215	215	to— 6
216	216	‘‘(aa) efficiency, 7
217	217	‘‘(bb) management function 8
218	218	or techniques, 9
219	219	‘‘(cc) market research, test-10
220	220	ing, or development, including 11
221	221	advertising and promotions, 12
222	222	‘‘(dd) routine data collec-13
223	223	tion, or 14
224	224	‘‘(ee) routine or ordinary 15
225	225	testing or inspection for quality 16
226	226	control. 17
227	227	‘‘(6) U
228	228	NITED STATES.—For purposes of this 18
229	229	subsection, the term ‘United States’ includes the 19
230	230	possessions of the United States. 20
231	231	‘‘(7) A
232	232	GGREGATION OF EXPENDITURES .—For 21
233	233	purposes of this subsection, in determining the 22
234	234	amount of qualified semiconductor design expendi-23
235	235	tures, rules similar to the rules of section 41(f)(1) 24
236	236	shall apply. 25
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239	239	•HR 802 IH
240	240	‘‘(d) COORDINATIONWITHCREDIT FORINCREASING 1
241	241	R
242	242	ESEARCH EXPENDITURES.—Any qualified semicon-2
243	243	ductor design expenditures for which a credit is allowed 3
244	244	under this section shall not be taken into account for pur-4
245	245	poses of determining the credit allowable under section 41 5
246	246	for such taxable year.’’, and 6
247	247	(4) by amending subsection (g) (as so redesig-7
248	248	nated) to read as follows:, by inserting ‘‘or qualified 8
249	249	semiconductor design expenditures paid or incurred 9
250	250	after December 31, 2026’’ before the period. 10
251	251	‘‘(g) T
252	252	ERMINATION OFCREDIT.—The credit allowed 11
253	253	under this section shall not apply to— 12
254	254	‘‘(1) property the construction of which begins 13
255	255	after December 31, 2036, or 14
256	256	‘‘(2) qualified semiconductor design expendi-15
257	257	tures paid or incurred after December 31, 2036.’’. 16
258	258	(b) C
259	259	ONFORMINGAMENDMENT.—Section 56A(c)(9) 17
260	260	of the Internal Revenue Code of 1986 is amended by strik-18
261	261	ing ‘‘48D(d)’’ and inserting ‘‘48D(f)’’. 19
262	262	(c) E
263	263	FFECTIVEDATE.—The amendments made by 20
264	264	this section shall apply to amounts paid or incurred after 21
265	265	the date of the enactment of this Act. 22
266	266	Æ
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