After months of negotiations, federal lawmakers voted along party lines to enact H.R. 5376, the Inflation Reduction Act. The bill was signed into law by President Joe Biden on Tuesday, August 16. The new law includes numerous tax provisions, drug pricing reform, and energy-related policy changes.
The most significant revenue-raising portion of the legislation is a 15% minimum tax on C-corporations that averaged more than $1 billion in book income for three consecutive tax years beginning on or after Dec. 31, 2022.
The law also includes a nondeductible 1% excise tax on corporate stock repurchases that would be effective for stock buybacks after Dec. 31, 2022. This tax is expected to raise $73 billion in revenue.
The AICPA posted a rundown of key tax provisions contained in the Act here.
The new law also includes supplemental appropriations of $79.6 billion over 10 years to the Internal Revenue Service and related agencies to bolster taxpayer services and enforcement of the tax code, which includes:
- $45.6 billion for tax enforcement activities
- $25.3 billion for operations support
- $3.2 billion for taxpayer services
- $4.8 billion for modernization of business services
If you have questions about this issue or other policy matters, please contact NCACPA Director of Advocacy Robert Broome, CAE.