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July 31, 2022
2022-1145

U.S. Tax This Week for July 29

Ernst & Young's U.S. Tax This Week newsletter for the week ending July 29 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.

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Top of the Week

Manchin, Schumer, Biden announce climate, health, tax deal

In a surprise development, Senator Joe Manchin (D-WV), Senate Majority Leader Chuck Schumer (D-NY), and President Biden July 27 announced a deal on a $740 billion reconciliation bill intended to be voted on in the Senate next week that includes climate/energy, health, and tax components and achieves $300 billion in deficit reduction. The announcement followed Senator Manchin apparently backing away from talks over a broader bill two weeks ago. He said in a statement this evening, "I now propose and will vote for the Inflation Reduction Act of 2022. Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions … " EY Tax Alert 2022-1140 has details.

House clears $280 billion 'Chips-Plus' bill for President's signature, 243-187

The House on Thursday, July 28, passed, by a vote of 243-187, the CHIPS and Science Act (HR 4346), a $280 billion bill that aims to build a domestic US supply chain for semiconductor chips in the face of foreign competition, while also spending billions on scientific and technological research to keep US industries competitive with China and other rivals. Twenty-four Republicans joined all but one Democrat in voting for the measure: Rep. Sara Jacobs (D-CA) voted "present." On July 27, the Senate had passed the bill by a vote of 64-33, with 17 Republicans voting in support. EY Tax Alert 2022-1144 has details.

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Upcoming Webcasts

Private equity and private capital — navigating transformative global and US legislative change (August 18)
During this EY Webcast, Ernst & Young professionals will discuss recent private equity and private capital industry trends and the outlook for US and international legislative and regulatory changes relevant to PE and alternative funds, transactions and portfolio companies.

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Recent Tax Alerts

Internal Revenue Service

— Jul 27: IRS makes substantive corrections to foreign tax credit regs, retroactively changing analysis on certain key issues of credibility (Tax Alert 2022-1132)

International

— Jul 27: USCIS extends COVID-19 related flexibilities and permanently allows for electronic signatures (Tax Alert 2022-1136)

— Jul 27: Latvia implements new Digital Nomad Visa (Tax Alert 2022-1135)

— Jul 27: Turkey increases ratio for time spent outside of Technology Development Zones and R&D centers (Tax Alert 2022-1133)

— Jul 26: UK publishes draft legislation on new transfer pricing documentation requirements (Tax Alert 2022-1131)

— Jul 26: Kenya introduces Country-by-Country reporting requirements (Tax Alert 2022-1130)

— Jul 26: Indian Government amends Special Economic Zone rules to permit employees of certain Special Economic Zone units to work from home (Tax Alert 2022-1128)

— Jul 26: Hong Kong enacts new legislation providing tax incentives for shipping commercial principals (Tax Alert 2022-1127)

— Jul 25: German Federal Ministry of Finance publishes draft DAC7 implementation bill (Tax Alert 2022-1125)

— Jul 25: Thailand gazettes income tax exemption for gains from disposal of shares in companies engaged in target industries, venture capital companies and trusts (Tax Alert 2022-1120)

Legislation

— Jul 28: House Ways and Means Committee advances 'Improving Seniors' Timely Access to Care Act of 2022' (Tax Alert 2022-1143)

— Jul 28: Reconciliation bill with tax provisions takes shape, Senate passes CHIPS-Plus bill (Tax Alert 2022-1139)

— Jul 27: Senate passes $280 billion 'Chips-Plus' bill, 64-33, aimed at keeping US competitive in microchips, science and research (Tax Alert 2022-1138)

— Jul 27: What to expect in Washington (July 27) (Tax Alert 2022-1134)

States

— Jul 27: Vermont guidance allows for exemption from state income tax for nonresidents in the state for a short duration (Tax Alert 2022-1137)

— Jul 25: Portland Revenue Division to consider adopting market-based sourcing and other changes to business income tax code for Portland, Oregon (Tax Alert 2022-1129)

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IRS Weekly Wrap-Up

Final Regulations

 TD 9959Guidance Related to the Foreign Tax Credit; Clarification of Foreign-Derived Intangible Income; Correction

Internal Revenue Bulletin

 2022-31Internal Revenue Bulletin of August 1, 2022

Because the matters covered herein are complicated, U.S. Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.

 

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.

 

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