Semiconductor Industry Presses IRS to Expand Tax Credit Rules

The US semiconductor and manufacturing industry Wednesday urged the IRS and Treasury Department to broaden who will be eligible for the tax credit for research and manufacturing of semiconductor chips.

The lucrative 25% tax credit was part of the CHIPS Act enacted last year to help boost US competitiveness against China. The law also included $52 billion in grants and incentives—an amount expected to be oversubscribed—in addition to the tax credit.

The IRS and Treasury proposed rules March 21, clarifying that facilities that manufacture materials or chemicals supplied to the manufacturing of semiconductors or equipment won’t qualify for the tax ...