I 
119TH CONGRESS 
1ST SESSION 
H. R. 802 
To amend the Internal Revenue Code of 1986 to add qualified semiconductor 
design expenditures to the advanced manufacturing investment credit. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 28, 2025 
Mr. MOORE of Utah (for himself, Ms. DELBENE, Mr. MCCAUL, Ms. MATSUI, 
Mr. MOOLENAAR, Mr. KRISHNAMOORTHI, Ms. TENNEY, Mr. KHANNA, 
Mr. MORELLE, Mr. BUCHANAN, Mr. CARSON, Mr. GOTTHEIMER, Ms. SE-
WELL, and Mr. PANETTA) introduced the following bill; which was re-
ferred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to add quali-
fied semiconductor design expenditures to the advanced 
manufacturing investment credit. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Semiconductor Tech-
nology Advancement and Research Act of 2025’’ or the 
‘‘STAR Act of 2025’’. 
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SEC. 2. QUALIFIED SEMICONDUCTOR DESIGN EXPENDI-
TURES ADDED TO ADVANCED MANUFAC-
TURING INVESTMENT CREDIT. 
(a) IN GENERAL.—Section 48D of the Internal Rev-
enue Code of 1986 is amended— 
(1) in subsection (a), by striking ‘‘an amount 
equal to’’ and all that follows through the period and 
inserting ‘‘, with respect to an eligible taxpayer, an 
amount equal to the sum of— 
‘‘(1) 25 percent of the qualified investment for 
such taxable year with respect to any advanced man-
ufacturing facility of such taxpayer, and 
‘‘(2) 25 percent of the qualified semiconductor 
design expenditures paid or incurred by such tax-
payer during the taxable year.’’, 
(2) by redesignating subsections (c), (d), and 
(e) as subsections (e), (f), and (g), respectively, 
(3) by inserting after subsection (b) the fol-
lowing new subsections: 
‘‘(c) QUALIFIED SEMICONDUCTOR DESIGN EXPENDI-
TURES.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(2), the term ‘qualified semiconductor design ex-
penditures’ means the sum of the following amounts 
which are paid or incurred by the taxpayer during 
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the taxable year in carrying on any trade or business 
of the taxpayer for— 
‘‘(A) in-house semiconductor design ex-
penses for semiconductor design conducted in 
the United States, and 
‘‘(B) contract design expenses for semicon-
ductor design conducted in the United States. 
‘‘(2) IN-HOUSE
SEMICONDUCTOR
DESIGN
EX-
PENSES.— 
‘‘(A) IN
GENERAL.—The term ‘in-house 
semiconductor design expenses’ means— 
‘‘(i) any wages paid or incurred to an 
employee for qualified services performed 
by such employee, 
‘‘(ii) any amount paid or incurred for 
supplies used in the conduct of qualified 
semiconductor design, and 
‘‘(iii) under regulations prescribed by 
the Secretary, any amount paid or in-
curred to another person for the right to 
use computers in the conduct of qualified 
semiconductor design. 
Clause (iii) shall not apply to any amount to 
the extent that the taxpayer (or any person 
with whom the taxpayer must aggregate ex-
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penditures under paragraph (7) receives or ac-
crues any amount from any other person for 
the right to use substantially identical personal 
property. 
‘‘(B) QUALIFIED
SERVICES.—The term 
‘qualified services’ means services consisting 
of— 
‘‘(i) engaging in qualified semicon-
ductor design, or 
‘‘(ii) engaging in the direct super-
vision or direct support of design activities 
which constitute qualified semiconductor 
design. 
If substantially all of the services performed by 
an individual for the taxpayer during the tax-
able year consists of services meeting the re-
quirements of clause (i) or (ii), the term ‘‘quali-
fied services’’ means all of the services per-
formed by such individual for the taxpayer dur-
ing the taxable year. 
‘‘(C) SUPPLIES.—The term ‘supplies’ has 
the meaning given such term in section 
41(b)(2)(C). 
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‘‘(D) WAGES.—The term ‘wages’ has the 
meaning 
given 
such 
term 
in 
section 
41(b)(2)(D). 
‘‘(3) CONTRACT DESIGN EXPENSES.— 
‘‘(A) IN
GENERAL.—The term ‘contract 
design expenses’ means 100 percent of any 
amount paid or incurred by the taxpayer to any 
person (other than an employee of the tax-
payer) for qualified semiconductor design. 
‘‘(B) PREPAID AMOUNTS.—If any contract 
design expenses paid or incurred during any 
taxable year are attributable to qualified semi-
conductor research to be conducted after the 
close of such taxable year, such amount shall be 
treated as paid or incurred during the period 
during which the qualified semiconductor design 
is conducted. 
‘‘(4) TRADE OR BUSINESS REQUIREMENT DIS-
REGARDED
FOR
IN-HOUSE
DESIGN
EXPENSES
OF 
CERTAIN STARTUP VENTURES.—In the case of in- 
house semiconductor design expenses, a taxpayer 
shall be treated as meeting the trade or business re-
quirement of paragraph (1) if, at the time such in- 
house semiconductor design expenses are paid or in-
curred, the principal purpose of the taxpayer in 
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making such expenditures is to use the results of the 
design in the active conduct of a future trade or 
business— 
‘‘(A) of the taxpayer, or 
‘‘(B) of 1 or more persons who with the 
taxpayer are treated as single taxpayer under 
paragraph (7). 
‘‘(5) QUALIFIED SEMICONDUCTOR DESIGN.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
semiconductor design’— 
‘‘(i) means the development (or direc-
tion of the development) of product design, 
design specifications, trade secrets, tech-
nology, or other intellectual property for 
the purpose of semiconductor manufac-
turing, substantially all of the activities of 
which constitute elements of a process of 
experimentation for a purpose described in 
subparagraph (B)(i), and 
‘‘(ii) does not include any activity de-
scribed in subparagraph (B)(ii). 
‘‘(B) PURPOSES
FOR
WHICH
RESEARCH 
MAY QUALIFY FOR CREDIT.—For purposes of 
subparagraph (A)— 
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‘‘(i) IN GENERAL.—Semiconductor de-
sign shall be treated as conducted for a 
purpose described in this paragraph if it 
relates to— 
‘‘(I) a new or improved function, 
‘‘(II) performance, or 
‘‘(III) reliability or quality. 
‘‘(ii) CERTAIN PURPOSES NOT QUALI-
FIED.—Semiconductor design shall in no 
event be treated as conducted for a pur-
pose described in this paragraph if it is 
conducted for purposes of— 
‘‘(I) style, taste, cosmetic, or 
other design factors unrelated to a 
purpose described in clause (i), 
‘‘(II) design after the commence-
ment of commercial production of the 
semiconductor, unless such design is 
related to firmware, software, or man-
ufacturing 
process 
activities 
that 
would otherwise meet the require-
ments of clause (i), 
‘‘(III) duplication of an existing 
semiconductor product (in whole or in 
part) from a physical examination of 
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