Overview

• Ohio Senator Bernie Moreno introduced the HIRE Act, proposing a 25% excise on payments by U.S. persons to foreign persons when services benefit U.S. consumers, alongside a ban on deducting those payments.
• Receipts would flow to a new Domestic Workforce Fund for apprenticeships and training, and the bill contemplates enhanced reporting, certifications, and stiffer noncompliance penalties.
• The proposal’s scope hinges on language covering benefits delivered “directly or indirectly,” apportionment for mixed markets, and anti-avoidance rules that could reach captives, affiliates, contractors, and freelancers abroad.
• Provisions would apply to payments made after December 31, 2025, with significant Treasury rulemaking expected to define key terms and compliance methods.
• Analysts warn of higher costs, tougher pricing negotiations, and slower deal closures for Indian IT vendors reliant on U.S. clients, while noting uncertain passage given House origination requirements for revenue measures.