The latest tax legislation brings a slew of changes aimed at boosting American innovation and competitiveness—both at home and abroad. Here are some of the biggest takeaways from this part of the bill:
Bigger Tax Credit for Advanced Manufacturing Investments
If your business manufactures semiconductors or other advanced technology components, you're in luck. The Advanced Manufacturing Investment Credit has been increased from 25% to 35% of qualified property placed in service after December 31, 2025.
This means qualifying businesses can claim a larger upfront credit when investing in manufacturing infrastructure—especially important for U.S. competitiveness in high-tech sectors.
Spaceports Now Treated Like Airports for Bond Financing
In a nod to the growing commercial space industry, the bill updates tax-exempt bond rules to include spaceports—facilities used for launching, reentering, manufacturing, or repairing spacecraft and space cargo.
Key points:
Spaceports can now benefit from tax-exempt facility bonds, just like airports.
Ground leases on federal land won’t disqualify a spaceport from being treated as publicly owned.
A spaceport does not need to be open to the general public.
Industrial parks and manufacturing facilities for spacecraft are included in the definition.
This could help attract private capital to space infrastructure, especially in states investing heavily in aerospace.
Foreign Tax Credit Changes: More Relief, More Complexity
A series of international tax reforms aims to ease the burden for multinational businesses while tightening some loopholes.
Key adjustments include:
Increased deemed-paid foreign tax credit: The share of foreign taxes that U.S. companies can claim as a credit on foreign income rises from 80% to 90%.
Better sourcing rules for U.S.-produced inventory: Income from sales of U.S.-made goods through foreign branches can now be partially sourced as foreign, allowing better use of foreign tax credits (limited to 50% of the sale income).
Updated deduction rules: The bill prevents some indirect expense allocations that previously reduced foreign-source income (such as interest and R&D), potentially improving foreign tax credit utilization.
FDII and GILTI Deductions Trimmed
Two deductions that benefit U.S. exporters and multinationals—FDII (Foreign-Derived Intangible Income) and GILTI (Global Intangible Low-Taxed Income)—are getting a haircut starting in 2026:
FDII deduction drops from 37.5% to 33.34%
GILTI deduction drops from 50% to 40%
While not drastic, these reductions will increase the U.S. tax liability on international income, slightly narrowing the advantage for U.S. multinationals.
Clarified FDII Scope: Now Covers More Sales
The definition of what qualifies for the FDII deduction has been expanded to explicitly include income from the sale or disposition of depreciable, amortizable, or intangible property, including things like patents and machinery.
At the same time, expense allocations have been tightened to ensure only directly related deductions count against this income.
This part of the bill reinforces a theme: invest in America, and you’ll be rewarded—especially in manufacturing, infrastructure, and advanced technology. At the same time, international tax changes aim to level the playing field without completely reversing prior incentives for global operations.
If your business deals in exports, manufacturing, tech, or operates internationally, these provisions could materially impact your tax planning starting in 2026.