Client Alert- The Inflation Reduction Act of 2022Aug 18, 2022
- FisherBroyles News
A copy of this Client Alert can be found here.
On Friday, August 12, 2022, the House of Representatives passed the Inflation Reduction Act of 2022, following the Senate’s passage by a 51-50 vote with Vice-President Harris’ vote breaking the 50-50 tie.
Once signed by the President, the Act will include:
- A 15% corporate minimum tax, based on a corporation’s book earnings, referred to as the Adjusted Financial Statement Income (AFSI) a/k/a book income. The minimum tax would apply to corporations with more than $1 billion of AFSI (and at least $100 million for members of foreign-parented international financial reporting groups in revenues).
*Exceptions from the tax include corporations with private equity investments and some form of a deduction for accelerated depreciation (details yet to be revealed).
- A 1% excise tax on corporate stock buy-backs, effective January 1, 2023 (which tax applies to the purchasing corporation and not the selling shareholder).
- $80 Billion of funding to the IRS for hiring additional auditors, modernizing IT and enhancing customer services (which means more audits down the road).
- Additional renewable energy credits, expansion of Affordable Care Act premium subsidies, and directions for the government to negotiate lower prices on what seniors pay for drugs.
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