Chamber and MichAuto Perspective on Newly Proposed Microchip R&D Tax Credit

Chamber and MichAuto Perspective on Newly Proposed Microchip R&D Tax Credit

Rep. John Moolenaar (R-Midland) joined a bipartisan coalition of his colleagues to introduce the Semiconductor Technology Advancement and Research (STAR) Act of 2024. This bill essentially creates a CHIPS Act 2.0, establishing a new tax credit for microchip research and design.

The proposed credit expansion allows employers to claim the credit when they pay employees to develop specific chip functions. Additional qualified semiconductor design expenditures would include the cost of supplies and computers used in chip design.

This credit expansion is essential for the U.S. and Michigan to remain competitive in the global race for semiconductor innovation. Further, reliance on Chinese chips poses a severe national security and economic stability challenge to the U.S.

Tax credits like this proposed expansion enable critical research by American companies that employ American workers. The more domestic manufacturing there is for one of the most vital components of the Michigan economy, the more stability automotive OEMs and suppliers can expect.

This tax reform debate is expected to start in January 2025.

The Detroit Regional Chamber and MichAuto applaud Moolenaar for his continued support of the automotive industry and work across the aisle to build a stronger economy. The Chamber will continue to monitor this tax credit.