Bill adds transformer makers to Advanced Manufacturing Production Credit

What does this do?

This bill creates a new 10 percent tax credit for companies that manufacture distribution transformers inside the United States. Distribution transformers are the devices that reduce high-voltage electricity from power lines to the lower voltage used in homes and businesses. The credit is added to an existing program called the Advanced Manufacturing Production Credit, which already covers items like solar panels and battery components.

Who does it affect?

This directly affects U.S. companies that manufacture distribution transformers. Electric utilities and consumers could be indirectly affected, since the country currently has a significant backlog and shortage of these transformers.

Why does it matter?

Making domestic production more financially attractive could lead to more transformers being built in the U.S. rather than imported. Federal tax revenue would be reduced somewhat as a result of the new credit.

What does it cost, and who pays?

• Federal tax revenue slightly reduced
• No direct effect on individual taxpayers