"For every dollar you spend on domestic labor, materials, and equipment in strategic sectors, the United States will give you back up to 20 cents as a tax credit."
Summary
DO IT NOW adds an enhanced 14% transferable credit (Section 38B) for strategic sectors, stacking on top of MINA's 6% credit. Together, the combined 20% credit on qualified Domestic Value Added costs delivers substantial benefits to all qualified manufacturers in critical sectors, including those investing, scaling up, or operating on thin margins. Strategic sectors face 30–60% cost disadvantages versus China. Startups and scaling manufacturers in semiconductors, chemicals, pharmaceutical inputs, batteries, and rare earths got zero benefit when competing against massive Chinese subsidies.
How It Works
The credit calculation mirrors MINA: Qualified DVA Costs × DVA Ratio × Leverage Factor × 14%. Combined with MINA, a strategic manufacturer with 80% DVA and minimal leverage receives a total credit of 20% of qualified DVA costs. For a pre-profit rare earth magnet startup losing $5M, the combined credit provides $2.68M in immediate cash (selling to Treasury at 85%), reducing operating losses by 63%. For a profitable semiconductor manufacturer, the combined credit can increase operating profit by over 53%.
Key Features
- 14% additional credit stacking on MINA's 6% for a combined 20% at 80% DVA
- Requires valid MINA (Section 38A) election for same tax year
- Same transferability rules: sell to qualified buyers or Treasury at 85%
- Same leverage adjustment and anti-abuse rules as MINA
- Covers ten strategic sectors with their full supply chains
- Coordinates with §45X credits, CHIPS Act incentives, and §199A
- 5-year recapture for offshoring triggers recapture of BOTH credits
Ten Strategic Sectors
Why It Matters
The U.S. cannot supply its defense industrial base. Its national security is at risk. It lacks the manufacturing base needed to conduct economic statecraft and support the growth of embodied AI. China controls over 85% of global rare earth processing, supplies over 80% of active pharmaceutical ingredients, and dominates telecommunications equipment manufacturing. The United States has no remaining domestic manufacturers of cellular network infrastructure. These vulnerabilities require strategic-level incentives beyond what broad manufacturing support can deliver.