On August 16, President Biden signed the Inflation Reduction Act into law. The legislation intends to tackle inflation by paying down the national debt, lowering consumer energy costs, offering incentives for clean energy production, and decreasing healthcare costs.
About $450 billion is expected to be raised by the act through new tax provisions. These provisions include a 15% minimum book tax on certain large corporations, a 1% excise tax on corporate stock buybacks, and a two-year extension of the section 461(l) loss limitation rules for noncorporate taxpayers, which is now set to expire for tax years beginning after 2028. Funding for the IRS has also been amplified by the act in the hopes of increasing tax collections over the next 10 years.
Over the next 10 years, $369 billion is being allocating to energy security and clean energy programs. The manufacturing of clean energy equipment and electric vehicles domestically is incentivized in some of the provisions. New credits and structures have been introduced to promote long-term investment in the renewables industry.
MarksNelson is keeping up-to-date on that latest legislative changes. If you have any questions about how this legislation will impact your business, please reach out to your MarksNelson advisor.