The NO GOTION Act prohibits green energy tax benefits for companies with ties to China, Russia, Iran, and North Korea. This applies to companies created, organized, or controlled by these countries.
John Moolenaar
Representative
MI-2
The NO GOTION Act aims to block green energy tax benefits for companies with connections to countries of concern, such as China, Russia, Iran, and North Korea. It denies specific tax credits and benefits to companies created, organized, or controlled by these countries, or by entities connected to them. This applies to various sections of the Internal Revenue Code related to green energy incentives. The changes will be effective for taxable years starting after the Act's enactment.
New 'NO GOTION Act' Cuts Green Energy Tax Breaks for Companies Linked to China, Russia, Iran, and North Korea
The "No Official Giveaways Of Taxpayers Income to Oppressive Nations Act," or NO GOTION Act, aims to block companies with ties to China, Russia, Iran, and North Korea from claiming a range of U.S. green energy tax credits. This means that any company created, organized, or 'controlled' by these nations, or by another company already disqualified, won't be eligible for these benefits. The law directly amends the Internal Revenue Code (adding Section 7531) to exclude these entities, effective for tax years starting after the bill's enactment.
Blocking the Benefits
The NO GOTION Act targets a wide array of green energy tax incentives, specifically listed under sections 30C, 40, 40A, 40B, 45, 45Q, 45U, 45V, 45W, 45X, 45Y, 45Z, 48, 48C, 48E, 179D, 6426(c), 6426(d), 6426(e), and 6427(e) of the Internal Revenue Code. These cover everything from alternative fuel refueling stations (30C) to credits for producing renewable energy (45, 45Y) and investments in clean energy facilities (48, 48E). By denying these credits, the bill intends to prevent U.S. taxpayer dollars from indirectly supporting the economies of these designated countries.
Real-World Rollout and Potential Roadblocks
This bill could shake things up for companies operating in the green energy sector, especially those with international ties. For example, a U.S.-based solar panel manufacturer that sources key components from a Chinese supplier might find itself ineligible for tax credits if that supplier is deemed 'controlled' by the Chinese government. Similarly, a biofuel producer relying on technology developed in Russia could lose out on benefits under sections 40, 40A, or 40B. Defining "control", as stated in SEC. 2, is key, and will likely be a point of contention and potential legal challenges as companies try to figure out if they qualify.
Bigger Picture: Security vs. Green Growth
The NO GOTION Act raises a critical question: How do we balance national security concerns with the need to rapidly expand green energy infrastructure? While the bill aims to prevent adversarial nations from benefiting from U.S. incentives, it could also slow down the overall transition to green energy. Supply chains in this sector are often global, and cutting off access to technologies or materials from these countries could create bottlenecks and increase costs for American consumers. It also might spur these countries to create their own closed loop supply chains to compete, and accelerate their own green tech without US involvement.
The law's long-term impact on international trade and diplomatic relations also remains to be seen. It essentially creates a financial disincentive for companies to collaborate with entities in the listed countries, potentially leading to a more fragmented global green energy market.