Supply Chain Security and Growth Act of 2025

This bill establishes a new critical supply chains reshoring investment credit , providing a 40 percent tax credit for qualified investments in facilities manufacturing essential goods. The primary goal is to incentivize the domestic production of critical items and strengthen supply chain resilience by encouraging investment in U.S. possessions and Puerto Rico. To qualify, facilities must primarily manufacture specific critical goods, including active pharmaceutical ingredients, drugs, medical devices, semiconductors, aerospace equipment, or artificial nanomaterials . The credit applies to tangible, depreciable property integral to the facility's operation, with the original use commencing with the taxpayer or being constructed/reconstructed by them. Eligibility is restricted to qualifying taxpayers , which excludes "prohibited foreign entities" with significant foreign government ownership or control. The credit offers flexibility through an elective payment option, allowing direct payment from the government, and is also transferable to other entities. An aggregation rule applies to affiliated groups, especially those investing in economically distressed zones. Additionally, the legislation increases the deemed credit for tested foreign income taxes paid to U.S. possessions from 80 percent to 100 percent. These provisions apply to property placed in service or taxes paid after December 31, 2024, aiming to bolster domestic manufacturing and economic activity in U.S. territories.