The NO GOTION Act amends the Internal Revenue Code to deny green energy tax benefits to companies associated with foreign adversaries, as defined by specific criteria regarding ownership, control, and influence. This applies to taxable years beginning after the enactment of this Act.
Rick Scott
Senator
FL
The "NO GOTION Act" denies green energy tax benefits to companies associated with foreign adversaries, including those owned, controlled, or influenced by them. This applies to various tax credits and incentives related to clean energy, and includes specific criteria for defining a "disqualified company" based on its ties to foreign adversaries. The bill aims to prevent foreign adversaries from benefiting from U.S. green energy tax incentives.
Green Energy Tax Breaks Slashed for Companies Linked to 'Foreign Adversaries': New Rules Kick in After Enactment
The "NO GOTION Act"—or, if you like mouthfuls, the "No Official Giveaways Of Taxpayers Income to Oppressive Nations Act"— just changed the game for green energy tax credits. Basically, if a company has ties to countries the U.S. considers adversaries, they can kiss those tax benefits goodbye. This impacts a wide range of credits, from those for electric vehicle charging stations (section 30C) to renewable energy production (sections 45, 45Y, and others). The change takes effect for taxable years starting after this bill becomes law.
Cutting Off the Cash Flow
The core idea is to stop U.S. tax dollars from indirectly benefiting countries we're not exactly friends with. The bill lists a bunch of tax credits (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)) that are now off-limits to "disqualified companies."
Who's a "Disqualified Company"?
This is where it gets interesting—and potentially tricky. A "disqualified company" isn't just a foreign government. It includes any company that:
- Is owned, controlled, or directed by a foreign adversary's government.
- Is based in or organized under the laws of a foreign adversary.
- Has 10% or more of its ownership stakes held by a foreign adversary.
- Is "materially influenced" by a foreign adversary (a pretty broad term).
- Has its operations or finances influenced by a foreign adversary through "prohibited obligations or arrangements."
For example, imagine a U.S.-based solar panel manufacturer that gets a significant loan from a bank in a designated "foreign adversary" country. That loan could be considered a "prohibited obligation," potentially disqualifying the company from claiming tax credits. The bill specifically calls out Cuba and Venezuela (under Maduro) as "foreign adversaries."
The "Substantial Benefit" Clause and the Secretary's Power
There is a clause that says buying equipment or inputs at "arm's length" doesn't count as providing a "substantial benefit" to an adversary. So, simply buying Chinese-made components for your solar farm probably won't disqualify you, provided it's a standard market transaction. However, the bill gives the Secretary (likely the Treasury Secretary) broad power to write the rules and prevent companies from dodging these restrictions. This means the specifics could change as the government figures out how to enforce this.
Real-World Ripples
While the goal is to protect U.S. interests, this bill could have some unintended consequences. Imagine a small American renewable energy startup that unknowingly gets funding from an investment firm that, in turn, has minor ties to a foreign adversary. That startup could suddenly lose access to crucial tax credits, putting them at a disadvantage. The broad definitions in this bill, especially around "material influence" and "prohibited obligations," leave a lot of room for interpretation—and potential headaches for businesses.