STAR Act of 2024

This bill amends the Internal Revenue Code to add a 25% tax credit for qualified semiconductor design expenditures to the existing advanced manufacturing investment credit. It allows eligible taxpayers to claim a credit equal to 25% of qualified investment in an advanced manufacturing facility plus 25% of qualified semiconductor design expenditures paid or incurred during the taxable year.

Sec. 2, Qualified semiconductor design expenditures added to advanced manufacturing investment credit: The bill defines qualified semiconductor design expenditures as the sum of in-house semiconductor design expenses (wages for qualified services, supplies, and computer use fees for design conducted in the United States) and contract design expenses (100% of amounts paid to non-employees for qualified semiconductor design). Qualified semiconductor design means development of product design, specifications, trade secrets, or intellectual property for semiconductor manufacturing that involves a process of experimentation for new or improved function, performance, or reliability/quality. It excludes design for style, taste, cosmetic factors, post-commercial production design (unless related to firmware, software, or manufacturing process), duplication of existing products, and certain surveys or studies. The credit does not apply to expenditures taken into account under the research credit (section 41). The amendments apply to amounts paid or incurred after the date of enactment, but qualified semiconductor design expenditures paid or incurred after December 31, 2026, are not eligible for the credit.