Calfee Connections

On June 14, the U.S. Department of Treasury and the Internal Revenue Service released proposed regulations that seek to provide guidance for taxpayers looking to make use of Section 48D Advanced Manufacturing Investment Credit (CHIPS ITC) benefits.

Earlier this spring, the Department of Treasury published proposed rules with respect to the advanced manufacturing investment credit established under the CHIPS and Science Act. While these are just proposed rules surrounding the potential tax credit and are not yet set in stone, companies and manufacturers may already have questions about whether they stand to benefit. 

For companies that wish to receive manufacturing incentives in connection with the CHIPS and Science Act, the newly created CHIPS Program Office (CPO) at the U.S. Department of Commerce will begin accepting applications this spring.

While semiconductor manufacturers, local governments, and economic development entities await the guidance, rules, and application format for these incentives from the U.S. Department of Commerce, there are steps that companies can begin taking to shape their project to be competitive toward the national effort to bolster the U.S. semiconductor ecosystem and provide for a skilled workforce necessary to drive innovation for the next generation.

With billions of dollars in financial assistance available under the CHIPS and Science Act (CSA), companies should ensure they have a working understanding of the CSA, which is viewed as the catalyst for Intel’s decision to build multiple semiconductor fabrication plants northeast of Columbus, Ohio.

Semiconductor chip manufacturer Intel Corporation has announced plans for a massive expansion into Ohio, intending to make an initial investment of more than $20 billion in the construction of two new leading-edge chip factories near Columbus. This investment (and recent federal legislation such as the CHIPS and Science Act, which provides over $50 billion in federal incentive funding and tax credits to help the American semiconductor industry reshore manufacturing and invest in the next generation of technology) represents an exceptional opportunity for Ohio residents and companies, though there may be some unique challenges tech companies could face when starting or growing operations in the Buckeye State.

Thanks to the passage of the CHIPS and Science Act, aimed at encouraging more investment in the tech sector to help produce more semiconductor chips here in the U.S., companies large and small are considering how to invest in the next generation of semiconductor manufacturing and considering lucrative federal incentives as a catalyst to this growth.

Our fully integrated and collaborative practice teams work to help clients successfully open or expand operations in Ohio by delivering expert legal and government relations counsel and advocacy.

After months of delay, the CHIPS Act of 2022 finally cleared both houses of Congress last week, as part of larger legislation focused on supporting many aspects of science and innovation.

On the latest episode of Calfee NOW, Josh Sanders, Vice Chair of Calfee's Government Relations and Legislation practice group, and Nick Bush, Principal with Calfee's Federal Government Relations and Policy group, spoke with Congressman Troy Balderson (OH-12).