# The STAR Act of 2024: Making Semiconductor Design More Affordable for Companies

This bill creates a new tax credit that gives companies money back on their taxes when they spend money designing semiconductors (computer chips) in the United States. Think of it like a rebate—if a company invests in chip design work, the government will essentially reimburse them 25 percent of what they spent.

Right now, companies can get tax credits for certain manufacturing investments, but semiconductor design work wasn't included. This bill adds design spending to that list. So if a company pays engineers to design chips, buys supplies for that design work, or hires outside contractors to do chip design, they can now get back 25 cents for every dollar spent on these activities. The design work has to happen in the United States to qualify, and it needs to be genuine innovation—creating new or improved chips, not just copying existing ones or making cosmetic changes.

The credit applies to two types of spending: money companies pay their own employees who work on chip design, plus costs for supplies and computer equipment they use for that work; and money they pay outside contractors to do chip design for them. The bill specifically excludes things that don't count as real innovation, like routine quality testing, market research, or design work that happens after a chip is already being manufactured commercially.

This policy is designed to encourage semiconductor companies to do more of their design work in America rather than overseas, which supporters argue will strengthen the domestic tech industry and create jobs for engineers and designers. The credit is set to expire after December 31, 2026, unless Congress extends it.