The Working Waterfront Disaster Mitigation Tax Credit Act proposes a new tax credit to incentivize hazard mitigation projects on certain working waterfront properties. This credit, equal to 30% of the qualified investment, is designed to help businesses protect their assets from natural disasters. The maximum credit a taxpayer can claim is $300,000, subject to inflation adjustments and aggregation rules for related entities.

To qualify, projects must involve eligible tangible, depreciable property and adhere to specific International Code Council building standards. These projects must be designed to prevent or mitigate damage from natural hazards through various methods, including

structural elevation
flood risk reduction
shoreline stabilization
floodproofing
retrofitting
warning systems

.

The eligible "working waterfront property" must be located in the United States or its possessions and used by a taxpayer for an active trade or business. This business must provide access to navigable waters for activities such as commercial fishing, recreational boating, aquaculture, or other water-dependent operations. Additionally, the business must meet a gross receipts test, with average annual gross receipts not exceeding $47,000,000 over the preceding three years, also subject to inflation adjustments.

The Secretary of the Treasury, in consultation with the Federal Emergency Management Agency Administrator, is tasked with issuing necessary regulations to implement this credit. The amendments made by this bill are set to apply to periods after December 31, 2025, with specific provisions for U.S. possessions.