Lawmakers unveil a bipartisan carbon border tax bill. Sen. Chris Coons (D-DE) and Kevin Cramer (R-ND) introduced a bill that would set the foundation for a carbon border tax. The European Union recently implemented rules to tax carbon-heavy imports, but many of those countries also have a domestic carbon tax, unlike the US. The Washington Post notes the lawmakers’ goal is to impose fees on iron, steel, and other imports from countries that are not significantly reducing greenhouse gas emissions.
Companies tax won’t face penalties this year related to the new corporate minimum tax, IRS says. The news comes via Politico (paywall). Even though the corporate alternative minimum tax (CAMT) – which uses financial accounting book income as a starting point – went into effect at the beginning of this year, implementation has been slow going. “Considering the challenges associated with determining the amount of a corporation’s CAMT liability and whether a corporation is an application corporation subject to the CAMT, the IRS will waive the penalty for a corporation’s failure to pay estimated income tax with respect to its CAMT,” the IRS said in an administrative notice.
Get ready for budget and tax battles with even higher stakes in 2025. TPC’s Howard Gleckman warns that with the Fiscal Responsibility Act (FRA) of 2023, Congress has created an epic mess for itself in two years. Lawmakers have to relitigate the debt limit battle with the fate of trillions of dollars in tax increases at stake. He charts what will happen as Congress grapplies with “the consequences of temporary tax policy even as it tries to satisfy ambitious but deeply conflicting goals.”
Can Artificial Intelligence (AI) be of use to average taxpayers? TPC’s Tax Hound Renu Zaretsky says, ”Yes.” She writes of her friends and family’s experiences using AI to address their tax questions. While AI can’t yet give tax advice, it can do a lot to build tax literacy.
Speaking of AI: TPC’s Prescription on June 22 with Libin Zhang. The Fried Frank partner will discuss how the growing popularity of artificial intelligence and tools like ChatGPT could impact tax policy and administration. Learn more and register for the noontime virtual event here.
Alabama temporarily exempts overtime pay from state income tax. The legislation, approved by the state legislature, exempts overtime pay from Alabama’s 5 percent income tax beginning in the 2024 tax year. Barring further legislative action, it will expire in June 2025. Republican Gov. Kay Ivey agreed to the temporary exemption after lawmakers shortened the original timeframe from three years to 18 months.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].