August 6, 2021
Report on recent US international tax developments – 6 August 2021
Following months of negotiation, the United States (US) Senate this week took up the US$1.2 trillion1 bipartisan infrastructure bill, the Infrastructure Investment and Jobs Act (HR 3684). Senators during the week offered several hundred amendments to the bill, which slowed the debate process, although the Senate ultimately is expected to pass the legislation. The text of the bill was released on 1 August.
Senate Majority Leader Chuck Schumer filed a motion for cloture on the bill on 5 August, setting up a vote to cut off debate, and announced that the Senate would reconvene at noon on 7 August for the cloture vote which requires a 60-vote threshold. “And then we will follow regular order to finish the bill,” the Majority Leader said. The final passage vote could come early next week, or perhaps earlier if all senators agree to yield back time.
Under the Majority Leader’s timetable, after the infrastructure bill is completed, the Senate will immediately turn to a motion to proceed to the Democrats’ $3.5 trillion, fiscal 2022 budget resolution, followed by debate and amendment votes sometime next week. It is possible the House could interrupt its August recess to come back and vote on the Senate-passed budget blueprint for a “human infrastructure” bill that will center on health care, climate, and caregiving, generally to be paid for by corporate tax increases, taxes on capital income, and taxes on the wealthy. The budget resolution, when passed in identical form by both chambers, unlocks the 51-vote budget reconciliation mechanism, and House and Senate committees will work to flesh out their assigned pieces of the massive, Democrats-only bill in September and October.
The OECD2 this week released a peer review report on BEPS3 Action 5 (harmful tax practices) and issued a press release that indicated that the US Government has confirmed its intention to abolish the Foreign Derived Intangible Income (FDII) regime. The OECD noted that it therefore classified FDII as “in the process of being eliminated.”
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC