Following passage by the Senate earlier this month, the House today passed the Inflation Reduction Act, a bill to address selected portions of the Biden administration’s agenda for climate change, healthcare and tax policy. The House adopted the same legislation that passed the Senate, and the bill now moves to President Biden for his signature.
As previously reported in ABA Daily Newsbytes, the legislation includes a book minimum tax (affecting corporations with income over $1 billion), and favorable adjustments for depreciation, selected amortization and controlled groups were made as the bill moved through the Senate. In addition, a 1% stock buyback excise tax on public companies and an extension of the excess business loss limitations were included. Generally, the tax revenue provisions are effective for 2023 forward.
The bill also includes rules related to prescription drugs, large expenditures on green energy and adds $80 billion over 10 years to the IRS budget to improve tax compliance, operations and enforcement. Importantly, a controversial reporting provision—that 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, together with other financial trade groups and bank customers, had vigorously opposed the proposal last year. The association continues to evaluate the bill’s provisions to determine its full implications for banks.