SHIPS for America Act of 2025

48F. United States vessel investment credit

(a) In general. For purposes of section 46, the United States Vessel Investment credit for any taxable year is an amount equal to the applicable percentage of any qualified investment for such taxable year with respect to any qualified vessel.

(b) Applicable percentage. For purposes of subsection (a), the applicable percentage with respect to any qualified vessel shall be an amount equal to the sum of—

(1) 33 percent, plus

(2) in the case of any qualified vessel for which the owner of such vessel will, as part of the agreement described in subsection (d)(1)(F) and for the duration of such agreement, obtain protection and indemnity insurance with respect to such vessel from an insurance company that is domiciled and headquartered in the United States and is an underwriter that is approved by the Maritime Administrator, 5 percent, plus

(3) in the case of any qualified vessel which is classified by and designed in accordance with the rules of the American Bureau of Shipping or any other classification society headquartered in the United States and recognized by the Secretary of the department in which the Coast Guard is operating in accordance with section 3316 of title 46, United States Code, 2 percent.

(c) Qualified investment. For purposes of subsection (a), the qualified investment with respect to any qualified vessel is equal to the amount paid or incurred by the taxpayer in connection with the construction, repowering, or reconstruction of such vessel—

(1) in a shipyard of the United States, and

(2) by an entity which is not a foreign entity of concern.

(d) Qualified vessel

(1) In general. For purposes of this section, the term qualified vessel means a cargo vessel—

(A) which is a United States flag vessel (as defined in section 1355),

(B) which, in the case of any repowering or reconstruction of such vessel, was originally constructed in the United States,

(C) which operates in providing transportation in the United States foreign trade (as such term is defined in section 1355(a)),

(D) which is not a passenger vessel, as defined in section 2101 of title 46, United States Code,

(E) which is—

(i) a bulk carrier vessel,

(ii) a tanker vessel,

(iii) a roll-on/roll-off vessel,

(iv) a container vessel,

(v) a multi-purpose vessel,

(vi) a cable vessel,

(vii) a heavy-lift vessel, or

(viii) any other type of vessel determined appropriate by the Maritime Administrator, in consultation with the Maritime Security Board,

(F) which, pursuant to an agreement between the taxpayer and the Maritime Administrator, operates as a vessel of the United States for a period of not less than 10 years,

(G) which has entered into an emergency preparedness agreement under section 53107 or 53407 of title 46, United States Code, or a contingency agreement under section 53207 of such title, or has otherwise entered into a voluntary agreement and plan of action with the Administrator of the Maritime Administration as authorized under section 708(c) of the Defense Production Act of 1950 (50 U.S.C. 4558(c)), and

(H) the construction of which begins before January 1, 2033.

(2) Exclusion related to foreign entities of concern. The term qualified vessel shall not include a vessel which—

(A) is, or was previously, owned or operated by a foreign entity of concern,

(B) was constructed, repowered, or reconstructed in a shipyard which is owned or operated by a foreign entity of concern, or

(C) was registered as a vessel of a foreign country of concern at any time prior to being placed in service by the taxpayer.

(e) Definitions

(1) Vessels. For purposes of subsection (d)(1)(E), any term used in such paragraph which is also used in chapter 536 of title 46, United States Code, shall have the same meaning as when used in such chapter.

(2) Foreign entity of concern; foreign country of concern. For purposes of this section, the terms foreign entity of concern and foreign country of concern have the same meaning given such terms under section 4 of the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act of 2025.

(f) Certain progress expenditure rules made applicable. Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a).

(g) Regulations. The Secretary, in consultation with the Maritime Administrator, shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including any regulations or guidance which may be necessary or appropriate to recapture the benefit of any credit determined under this section with respect to any qualified vessel, or any increase in the applicable percentage under subsection (b) with respect to any qualified vessel, in the case of any taxpayer which fails to comply with the terms of the agreement described in subsection (d)(1)(F) with respect to such qualified vessel.

(8) the United States Vessel Investment credit.

(ix) with respect to any qualified vessel (as defined in section 48F(d)), the portion of the basis of such vessel attributable to amounts paid or incurred by the taxpayer in connection with the construction, repowering, or reconstruction of such vessel.

Sec. 48F. United States Vessel Investment credit.

(6) Failure to operate qualified vessel as a vessel of the United States

(A) In general. If an applicable taxpayer violates any of the requirements of the agreement described in section 48F(d)(1)(F) during the duration of such agreement with respect to any investment credit property which is eligible for the United States Vessel Investment credit under section 48F(a), then the tax under this chapter for the taxable year in which such violation occurs shall be increased by 100 percent of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under section 46 which is attributable to the United States Vessel Investment credit under section 48F(a) with respect to such property.

(B) Exception. Subparagraph (A) shall not apply if the applicable taxpayer demonstrates to the satisfaction of the Secretary and the Maritime Administrator that the taxpayer is in compliance with the agreement described in section 48F(d)(1)(F) within 30 days of a determination and notice by the Secretary.

(C) Regulations and guidance. The Secretary shall issue such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of this paragraph, including regulations or other guidance which provide for requirements for recordkeeping or information reporting for purposes of administering the requirements of this paragraph.

(E) Applicable taxpayer. For purposes of this subsection, the term applicable taxpayer means any taxpayer who has been allowed—

(i) for purposes of paragraph (3), a credit under section 48D(a) for any prior taxable year, or

(ii) for purposes of paragraph (6), a credit under section 48F(a) for any prior taxable year.

(13) The United States Vessel Investment credit under section 48F.

(E) Election with respect to United States vessel investment credit. If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has made a qualified investment with respect to any qualified vessel (as defined in section 48F), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(13).

(xii) The United States Vessel Investment credit under section 48F.

(4) Exception for United States vessel investment credit. Paragraph (1) shall not apply with respect to any credit allowed to the taxpayer under section 48F.