HR3401-119

What This Bill Does

The Retreaded Tire Jobs, Supply Chain Security and Sustainability Act creates a new Internal Revenue Code section 45BB retreaded tire credit. For each taxable year, the credit equals qualified tire retreading expenses up to the lesser of 30 percent of amounts paid or incurred to purchase qualified retreaded tires placed in service or $30 multiplied by the number of qualified retreaded tires. A qualified retreaded tire must be retreaded in the United States and purchased in the United States. Treasury must issue regulations and guidance, and no credit is available for tires placed in service after December 31, 2028. The bill also requires federal agency heads to order retreaded tires instead of new non-retreadable tires whenever a retreaded tire is available on the GSA tire schedule in the desired size, load range, and tread designation, and it requires the Federal Acquisition Regulation to be updated within one year.

Who Benefits and How

Businesses buying U.S.-retreaded tires benefit from a temporary tax credit worth up to 30 percent of purchase costs or $30 per tire. Domestic tire retreaders benefit from higher demand driven by the tax credit and federal fleet purchasing requirement. Federal fleet managers benefit from a procurement rule that identifies when GSA-schedule retreaded tires should be used. Environmental sustainability advocates benefit because tire retreading can reduce waste and new tire demand.

Who Bears the Burden and How

Treasury tax staff must issue regulations and guidance for the new section 45BB credit. Federal agency procurement officers must order available GSA-schedule retreaded tires instead of new non-retreadable tires. FAR Council staff must update the Federal Acquisition Regulation within one year. New tire manufacturers may lose sales where retreaded tires are available and required for federal fleets. Federal taxpayers bear the revenue cost of the temporary credit through 2028.

Key Provisions

• Creates a retreaded tire credit for U.S.-retreaded and U.S.-purchased tires.
• Limits the credit to the lesser of 30 percent of qualified purchase costs or $30 per qualified tire.
• Terminates credit eligibility for tires placed in service after December 31, 2028.
• Requires federal agencies to order available GSA-schedule retreaded tires instead of new non-retreadable tires.
• Directs the FAR to be updated within one year.