“When life was slow and oh so mellow…” The Senate easily cleared the way for a vote later this week on a $52 billion bill to encourage US production of computer chips. The measure also includes a temporary investment tax credit for chip makers and more than $200 billion in other tech-related funding. The House, which passed a different version earlier this year, still must approve the Senate measure.
“When the grass was green and the grain was yellow…” Senate Finance Committee Chair Ron Wyden says more IRS funding still may be included in the long-stalled budget reconciliation bill, Bloomberg reports. Wyden says extra money the IRS collects could fund a further extension of Affordable Care Act health insurance subsidies.
“When dreams were kept beside your pillow…” Senate Democrats are gearing up to release their 2023 spending bills this week. The measures would keep the federal government running after Sept. 30 but senators continue to disagree over the top-line funding amounts and other issues. The House already passed six of its spending bills. Sen. Brian Schatz predicts at least one stop-gap funding bill this fall: “I think it’s going to be a CR [continuing resolution] in September…” adding that funding bills might pass after the November midterms.
“Deep in December it's nice to remember…” House Ways & Means member Dan Kildee says the panel still may try to develop a tax package before the year is out. It could include bipartisan clean energy tax incentives, restore a larger research tax break that expired this year, and suspend certain tariffs. The problem, as always, is the Senate where Democrats don’t have the 50 votes they need to pass the bill on a party-line basis. Democrat Joe Manchin and all Republicans are likely to oppose the clean energy provisions. Some Democrats also oppose restoring the research tax benefit.
“Although you know the snow will follow…” Sens. Pat Toomey and Kyrsten Sinema want to exempt crypto transactions of $50 or less from capital gains tax. Right now, the IRS treats cryptocurrency assets as property, so consumers must track and pay capital gains tax every time they sell cryptocurrency, even if it is to buy something. To increase the use of cryptocurrency in mainstream commerce, the Virtual Currency Tax Fairness Act would exclude transactions up to $50 from capital gains tax.
“No one wept except the willow…” Treasury is easing foreign tax credit limits. Tax rules on what costs corporations can deduct from their income taxes don’t have to be exactly like US rules for firms to qualify for foreign tax credits, according to new Treasury guidance. Treasury eased rules it adopted in January after corporations warned they are at risk of being double taxed—which is exactly what the foreign tax credit aims to prevent.
“Without a hurt the heart will hollow…” After an audit, officials are improving Georgia’s film tax credit program. A 2020 Department of Revenue review found the film credits were poorly managed and questioned the accuracy of fiscal impact estimates. The department is now developing a detailed manual for future audits, strengthening oversight, and tightening rules that govern how film companies transfer or sell unused tax credits.
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