From NTRA
WASHINGTON, D.C. (Aug. 15, 2022) As expected, last week the House of Representatives passed the $700 billion clean energy and tax reconciliation bill, which will be signed into law by President Biden this week. With no changes from the Senate version we highlighted last week, it continues to mean good news for the Thoroughbred industry since this bill will have very little that will directly impact individual horse and farm owners. Here’s what you need to know:
- Corporate Minimum Tax – The bill includes a 15% minimum tax on corporations that exceed a $1 billion financial statement income threshold. However, an amendment included in the bill allows portfolio companies to be counted separately from their owner by extending the $10,000 cap on state and local tax deductions for another year. This provision will help protect small and medium-sized businesses that would have been hit by the new tax without the change.
- IRS Funding – High earners will face a better-funded, more aggressive IRS under the bill, because it included increased funding for enforcement.
- What’s not included: Absent from the bill was the Administration’s proposed tax changes from last year, which included changes to capital gains and the estate tax. Also not included are any changes to the current depreciation provisions that horse owners rely on. Both of these exclusions are good news for the Thoroughbred industry.