After passing the Senate earlier this month, the House today passed the Cutting Inflation Act, a bill addressing parts of the Biden administration’s agenda on climate change, health and tax policy. The House passed the same legislation that passed the Senate, and the bill is now being forwarded to President Biden for his signature.
As previously reported in ABA Daily Newsbytes, the legislation includes a minimum book tax (affecting corporations with revenues over $1 billion) and favorable adjustments for depreciation, selected depreciation and controlled groups have were made as the bill passed through the Senate. In addition, a 1% excise tax on share buybacks on public companies and an extension of excess business loss limitations have been included. As a general rule, the tax revenue provisions apply from 2023.
The bill also includes rules for prescription drugs, large green energy expenditures and adds $80 billion over 10 years to the IRS budget to improve tax compliance, operations and enforcement. Importantly, a controversial reporting provision – which would have required banks to report information on gross inflows and outflows on customer accounts above a certain de minimis level – was omitted from the reconciliation package. The American Bankers Association, along with other financial trade groups and bank customers, had vigorously opposed the proposal last year. The association continues to evaluate the provisions of the bill to determine all of its implications for banks.