Tax Credit Made Possible by Brown’s Bipartisan CHIPS and Science Act
WASHINGTON, D.C. – March 6, 2023 – U.S. Senator Sherrod Brown (D-OH) sent a letter to Janet Yellen, Secretary of the U.S. Department of the Treasury (Treasury) urging Treasury to issue guidance for companies seeking funding from the Investment Tax Credit (ITC) that was a part of the bipartisan CHIPS and Science Act. The ITC will help strengthen the domestic semiconductor supply chain, create good-paying jobs and bolster the economies of communities across the industrial heartland. The ITC was made possible by the CHIPS Act of 2022, which includes historic funding for domestic semiconductor manufacturing as well as support for other essential priorities in Ohio’s economy. Brown was instrumental in moving the legislation through the Senate.
“As you finalize guidance with respect to the ITC, I urge you to engage with industry stakeholders and consider the timelines of taxpayers that intend to claim the credit, so that the guidance from Treasury provides maximum flexibility and allows for robust investment in semiconductor manufacturing. To the extent that Treasury works in coordination with other agencies to develop the guidance, I urge you to ensure a meaningful NEPA process but to be mindful of the constraints a burdensome review can impose on investment,” wrote Brown.
The CHIPS and Science Act authorizes an historic investment of $829 million in the Manufacturing USA program over the next five years, the largest increase in the program’s funding since its inception. The CHIPS Act will support and grow domestic supply chains, invest in Ohio manufacturing jobs, and reduce costs for Americans by investing in American manufacturing. Currently, 90 percent of chip manufacturing capacity is overseas, but with investments in domestic manufacturing – like Intel’s $20 billion investment in a semiconductor plant in New Albany – chips will become a major American export out of Ohio.
A copy of the letter is available here and below:
Dear Secretary Yellen:
I urge you to swiftly provide guidance from the Department of Treasury (Treasury) with respect to the Investment Tax Credit (ITC) included in the bipartisan CHIPS and Science Act, enacted by Congress last year. You and I share a commitment to investing in American manufacturing, including increasing the domestic production of semiconductors — an economic and national security imperative. Paired with the CHIPS incentives managed by the Department of Commerce, implementation of the ITC will help strengthen our domestic semiconductor supply chain, create good-paying jobs, and bolster the economies of communities across the industrial heartland.
When Congress passed the CHIPS and Science Act, we intended to pair grant opportunities with the ITC to facilitate the reshoring of semiconductor manufacturing in the United States. This week the Department of Commerce issued its notice of funding opportunities for “Commercial Fabrication Facilities.” Now is the time for Treasury to issue the rules for ITC eligibility.
Ohio – with its world-class universities, skilled workforce, federal assets like Wright Patterson Air Force Base, and abundant resources – is an ideal location for a vibrant semiconductor sector. Intel recognized this and began construction on two, state-of-the-art fabrication facilities in Ohio. This $20 billion investment will help transform the region. The ability to claim the ITC, paired with a CHIPS grant, will ensure that this investment is competitive with foreign facilities and help develop a semiconductor ecosystem in Ohio and throughout the Midwest.
As you finalize guidance with respect to the ITC, I urge you to engage with industry stakeholders and consider the timelines of taxpayers that intend to claim the credit, so that the guidance from Treasury provides maximum flexibility and allows for robust investment in semiconductor manufacturing. To the extent that Treasury works in coordination with other agencies to develop the guidance, I urge you to ensure a meaningful NEPA process but to be mindful of the constraints a burdensome review can impose on investment.
Congress passed, and President Biden signed, the CHIPS and Science Act because of our shared commitment to reinvigorating American manufacturing and positioning the U.S. as a global leader in semiconductor production. I appreciate your prompt attention to this issue and look forward to our ongoing work to advance America’s leadership on semiconductor manufacturing well into the future.