Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

August 12, 2022

Report on recent US international tax developments 12 August 2022

This week started off with the news that on 7 August, the United States (US) Senate approved the Inflation Reduction Act (IRA) of 2022 (H.R. 5376), voting 51-50 along party lines, with Vice President Kamala Harris breaking the tie. The bill includes climate and energy provisions and an extension of enhanced Affordable Care Act (ACA) subsidies paid for by a 15% corporate alternative minimum tax (CAMT) on adjusted financial statement income for corporations with profits over US$1 billion, a stock buyback tax, increased Internal Revenue Service enforcement funding, and prescription drug provisions, including permitting Medicare to negotiate certain prescription drug prices. Today, 12 August, the House reconvened to consider the Senate bill (at the time of publication, the House is still in debate but the bill is expected to be passed).

The bill, which stalled late last year when negotiations broke down between the White House and Senator Joe Manchin, gained traction again this July in a much smaller form with a deal backed by Senate Majority Leader Chuck Schumer and Senator Manchin. The deal, announced on 27 July, was joined by Senator Kyrsten Sinema, with changes, on 4 August.

The revised text of the measure, released on 6 August, modified the 27 July compromise reached between Senator Joe Manchin and Senate Majority Leader Chuck Schumer including by: (1) dropping the carried interest holding period provision; (2) adding a 1% stock buyback tax; and (3) making certain changes to CAMT language with respect to depreciation for tangible assets and amortization deductions for qualified wireless spectrum.

In other legislative news, on 9 August, President Joe Biden signed the CHIPS and Science Act (H.R. 4346), a US$280 billion package that provides incentives for companies to produce semiconductor chips domestically and authorizes future appropriations for research.

President Biden has said, "As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: It will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers. It also will create jobs — good-paying jobs right here in the United States."

The CHIPS and Science Act, where CHIPS stands for Creating Helpful Incentives to Produce Semiconductors, includes US$52.7 billion in funding for semiconductor manufacturing subsidies, grants and loans. US$24 billion is marked to be spent in fiscal 2022.


For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more