Increased gross receipts threshold for small manufacturing businesses

(a) In general Section 448(c) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: (4) Gross receipts test for manufacturing taxpayers In the case of a manufacturing taxpayer, paragraph (1) shall be applied by substituting $80,000,000 for $25,000,000.. (b) Inflation adjustment Section 448(c)(5) (as so redesignated) is amended by striking the dollar amount in paragraph (1) shall be increased and inserting the dollar amounts in paragraphs (1) and (4) shall each be increased. (c) Manufacturing taxpayer defined Section 448(d) is amended by redesignating paragraph (8) as paragraph (9) and by inserting after paragraph (7) the following new paragraph: (8) Manufacturing taxpayer (A) In general The term manufacturing taxpayer means a corporation or partnership substantially all the gross receipts of which during the 3-taxable-year period described in subsection (c)(1) are derived from the lease, rental, license, sale, exchange, or other disposition of qualified products. (B) Qualified product For purposes of subparagraph (A), the term qualified product means a product that is both— (i) tangible personal property which is not a food or beverage prepared in the same building as a retail establishment in which substantially similar property is sold to the public, and (ii) produced or manufactured by the taxpayer in a manner which results in a substantial transformation (within the meaning of section 168(n)(2)(D)) of the property comprising the product. (C) Aggregation rule Solely for purposes of determining whether a taxpayer is a manufacturing taxpayer under subparagraph (A)— (i) gross receipts shall be determined under the rules of paragraphs (2) and (3) of subsection (c), and (ii) for purposes of subsection (c)(2), in applying section 52(b), the term trade or business shall include any activity treated as a trade or business under paragraph (5) or (6) of section 469(c) (determined without regard to the phrase To the extent provided in regulations in such paragraph (6)).. (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.