US Bill Proposes 10% Tax Credit for Mass Timber Facilities

Mass Timber Growth and Innovation Act Introduced

A bipartisan legislative proposal, the Mass Timber Growth and Innovation Act, was introduced in the United States Congress on 20 October. Sponsored by Representative Andrea Salinas (Democrat, Oregon) and Representative Glenn “GT” Thompson (Republican, Pennsylvania), the bill seeks to expand domestic manufacturing capacity for mass timber products.

Its stated objectives include supporting the national timber industry, reducing housing construction costs, and creating manufacturing employment opportunities in rural communities. Proponents suggest that increasing local production of mass timber can help address housing affordability challenges across the country.

Two-Tiered Tax Credits Proposed

The proposed legislation outlines two distinct tax incentives to encourage investment in the mass timber sector. Companies investing in new mass timber manufacturing facilities, which includes buildings, machinery, and equipment, would be eligible for a 10% tax credit. This incentive would be applied through the existing Advanced Manufacturing Investment Credit.

Additionally, the act proposes a separate 20% tax credit specifically for qualifying expenditures on mass timber research. This research credit is intended to support the development of new products and improved production methods, fostering innovation within the industry.

Addressing Housing Costs with Mass Timber

Mass timber products, formed by bonding or fastening layers of wood into structural components such as panels and beams, offer advantages for construction, particularly in mid-rise housing projects where conventional timber framing may be impractical.

Their suitability for off-site manufacturing allows for quicker on-site assembly, potentially reducing overall construction time and costs. However, current limitations in domestic manufacturing capacity have contributed to higher material prices, hindering broader adoption.

Representative Salinas visited Timberlab's mass timber production facility in Portland, Oregon, to discuss the bill, noting that Oregon alone needs to build nearly 500,000 new homes over the next two decades to meet demand.

Global Timber Market Influence

Organizations supporting the Mass Timber Growth and Innovation Act include the American Wood Council, Chamber of Progress, Oregon Forest Industries Council, Washington Mass Timber Accelerator, and Weyerhaeuser.

While this legislation is focused on the United States, successful implementation and a resulting increase in US domestic mass timber production could influence global supply chains for wood products.

Asian manufacturers of timber components may face shifts in international market demand, and procurement teams for large-scale projects across Asia could see changes in material availability or pricing for wood-based structural elements. Specifiers in Asia should observe these developments for potential impacts on sourcing strategies and material choices in the coming years.