The bill adds a new Section 45BB to the Internal Revenue Code that creates a refundable business credit for ‘‘qualified retreaded tires’’—tires retreaded in and purchased in the United States—calculated per tire and capped either at 30 percent of the purchase cost or $30 per tire. The credit is placed in the general business credit regime, becomes available for tires placed in service after December 31, 2025, and terminates for tires placed in service after December 31, 2028.
Separately, the bill requires federal agencies to order a retreaded tire from the GSA tire schedule whenever an appropriately sized and specified retreaded tire is available, and it directs an update to the Federal Acquisition Regulation within one year to implement that requirement. The policy is targeted at boosting domestic retreading capacity, improving supply chain resilience, and promoting reuse, while creating new procurement and compliance obligations for agencies and vendors.
At a Glance
What It Does
Creates a per-tire tax credit for domestically retreaded tires equal to the lesser of 30% of the taxpayer’s cost or $30 per qualified tire, adds the credit to the general business credit, sets an effective start (tires in service after Dec 31, 2025) and a statutory termination (after Dec 31, 2028). Separately, it obligates agencies to purchase GSA-listed retreaded tires when available and requires a FAR update within one year.
Who It Affects
Commercial and public fleet operators who purchase replacement tires, U.S. retreading facilities and their suppliers, GSA and federal procurement officials, and vendors on the GSA tire schedule. Tax compliance officers and payroll/tax teams at affected firms will need to claim and substantiate the credit.
Why It Matters
The measure uses tax and procurement levers to create market pull for domestically retreaded tires—an uncommon combination that can rapidly shift demand onto a small domestic industry, affect new-tire manufacturers, and create immediate procurement compliance requirements for federal fleets and vendors.
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What This Bill Actually Does
The bill establishes a narrowly framed tax incentive and pairs it with a federal procurement directive. For tax purposes it adds a new credit available through the general business credit system; taxpayers claim an amount tied to ‘‘qualified retreaded tires’’ they place in service.
The credit calculation is simple on its face: per tire, take the lesser of 30 percent of the purchase price or $30, and sum those amounts for the taxable year. Only tires retreaded and purchased within the United States qualify.
The Treasury Secretary is given rulemaking authority to flesh out the details.
The tax provisions include timing controls: the credit applies only to tires placed in service after December 31, 2025, and Congress sets a hard stop by disallowing credit for tires placed in service after December 31, 2028. The credit is added to section 38’s general business credit basket, which affects how businesses aggregate credits and interact with other tax attributes; taxpayers will need to follow the usual rules for claiming and carrying general business credits.On the procurement side, the bill directs federal agencies to choose a retreaded tire from the GSA schedule when a retreaded tire in the required size, load range, and tread designation is available, and it requires the FAR to be updated within one year to reflect that mandate.
The bill uses the GSA schedule as the gateway: if a matching retreaded tire is not listed, the procurement obligation does not apply. The definition of agency mirrors the executive agency definition in title 41, so the requirement reaches the main federal operating agencies but follows existing procurement definitions and exceptions.Together, the two tools are designed to quickly increase demand for U.S.-retreaded tires—tax relief for purchasers plus a guaranteed federal buyer when GSA stocks the product.
That combination accelerates market signals but also raises immediate questions about certification, paperwork, supply capacity, and how the Treasury and procurement officials will implement and enforce the rules during the three-year window the statute creates.
The Five Things You Need to Know
The credit equals, per qualified retreaded tire placed in service, the lesser of 30% of the purchaser’s cost or $30 multiplied by the tire count; taxpayers sum those per-tire amounts for the year.
A ‘‘qualified retreaded tire’’ must be retreaded in the United States and purchased in the United States to qualify for the credit.
The credit applies only to tires placed in service after December 31, 2025, and the statute bars credits for tires placed in service after December 31, 2028 (a three-year window).
Congress adds the retreaded tire credit to the general business credit (section 38), so taxpayers must follow existing aggregation, limitation, and carryback/carryforward rules for that credit category.
If a retreaded tire matching the required size, load range, and tread designation is available on the GSA tire schedule, the head of an agency must order that retreaded tire instead of a new, non-retreadable tire; the FAR must be updated within one year to include this requirement.
Section-by-Section Breakdown
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Short title
Names the statute the ‘‘Retreaded Tire Jobs, Supply Chain Security and Sustainability Act of 2025.’
Creates the retreaded tire tax credit and places it in the general business credit
This provision adds section 45BB to the Internal Revenue Code. It defines the credit calculation (per-tire amount, capped by 30% or $30), ties eligibility to tires retreaded and purchased in the U.S., and requires Treasury to issue implementing regulations. The bill also amends section 38 to treat the retreaded tire credit as part of the general business credit, which means businesses will compute the new credit alongside other credits subject to the same ordering, limitation, and carry rules; compliance teams will need to track qualified tires placed in service and supporting documentation to substantiate claims under the general business credit framework.
Regulatory authority, statutory sunset, and effective date
The Secretary of the Treasury must issue regulations and guidance necessary to carry out section 45BB, providing the administrative hook for definitions, substantiation requirements, timing, and interaction with other tax rules. Congress sets an explicit termination: no credit for tires placed in service after December 31, 2028. The coded effective date makes the credit available only for tires placed in service after December 31, 2025. Those timing choices compress implementation and create a fixed three-year window for taxpayers and the retreading industry to act.
Federal procurement requirement and FAR update
This section requires federal agencies to order a retreaded tire from the GSA schedule when a retreaded tire matching the requested size, load range, and tread designation is available, rather than ordering a new non-retreadable tire. It also directs a FAR revision within one year of enactment to incorporate the requirement into procurement regulations. Practically, the GSA schedule becomes the chokepoint: vendors must list appropriate retreaded tires for agencies to be compelled to buy them, and procurement officers must check schedule availability before procuring new tires.
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Explore Economy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- U.S. retreading facilities and their workers — the statute creates immediate market demand through both a federal procurement preference and a per-tire tax subsidy, improving margins for domestic retreaders if supply can scale.
- Fleet operators who purchase replacement tires (private and public) — purchasers can reduce net tire cost via the per-tire credit during the three-year window, lowering operating expenses for high-mileage fleets that qualify and substantiate purchases.
- GSA schedule vendors that list U.S.-retreaded tires — listing appropriate retreads on the GSA schedule can unlock federal sales as agencies are required to choose listed retreads when specifications match.
- Supply chain resiliency planners and sustainability officers — the measure promotes reuse and domestic sourcing, which can reduce dependence on new-tire imports and lower lifecycle environmental impact if retreading is implemented safely.
Who Bears the Cost
- New-tire manufacturers and importers — reduced demand from federal fleets and private buyers claiming the credit could cut new-tire sales in replacement markets during the credit window.
- Federal procurement offices and agency contracting officers — they must alter procurement practices, verify GSA schedule availability, and implement FAR changes, adding administrative work and potential training costs.
- Treasury/IRS and GSA — both agencies face added implementation and enforcement burdens: Treasury must write regulations and audit eligibility, while GSA must manage schedule listings and ensure vendors meet domestic retreading requirements.
- Tax compliance teams at fleets and vendors — businesses must document domestic retreading, track tires placed in service, and integrate the credit into general business credit filings, increasing recordkeeping and potentially professional tax costs.
Key Issues
The Core Tension
The central dilemma is between creating rapid market demand for domestic retreads (to shore up supply chains and advance reuse) and maintaining procurement flexibility, safety standards, and fiscal prudence: a powerful short-term incentive and a procurement mandate can quickly shift markets, but they require close regulatory detail and enforcement to prevent safety compromises, supply bottlenecks, and improper claims.
The bill’s short window and tight domestic-only qualification create implementation pressure. Treasury must quickly define ‘‘retreaded in the United States’’ (e.g., whether partial operations or component imports disqualify a tire) and set substantiation rules to avoid abuse; weak rules risk fraud or reclassification of imported products as domestically retreaded.
At the same time, aggressive substantiation requirements could stifle small retreaders’ ability to participate.
On procurement, using the GSA schedule as the trigger is administratively neat but operationally brittle: if the GSA pool lacks the correct sizes or load/tread specifications, agencies are exempt, which limits the policy’s reach. If demand jumps faster than domestic capacity, fleets may face supply delays or be forced to buy suboptimal tires.
Finally, treating the credit as part of the general business credit reduces some gaming risk but also creates complex interactions with other credits, carrybacks, and taxable income calculations that could blunt the incentive for certain taxpayers.
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