22 October 2023 Americas Tax Policy: This Week in Tax Policy for October 20 The House Ways & Means Committee has announced the following hearings for this week:
The Senate stands adjourned until Monday, October 23, when it will convene for a pro forma session only. A vote has been set for 2:15 p.m. on Tuesday, October 24, on the nomination of Michael Whitaker to be Administrator of the Federal Aviation Administration. Whitaker received a unanimous vote in the Senate Commerce Committee Wednesday and, as the Washington Post reported, enjoys strong support. The Senate Finance Committee is holding a hearing, "Exploring Paid Leave: Policy, Practice, and Impact on the Workforce," on Wednesday, October 25 (at 10 a.m.). OECD: Also this week, on October 26, the OECD will hold a technical webinar on the Multilateral Convention to Implement Amount A of Pillar One. The big picture: The House ended another workweek without a Speaker. Rep. Jim Jordan (R-OH) failed in numerous attempts to gain the necessary votes to become House Speaker, and so House Republicans will return to Washington next week to seek new candidates. Jordan entered the weekend falling short of the 217 votes required (or fewer based on absences/attendance) in votes on October 17, 18, and 20, when he won 200 votes, 199 votes, and 194 votes, respectively. Efforts to vote on granting Rep. Patrick McHenry (R-NC) additional powers as acting speaker stalled October 19 amid further disagreement within the Republican conference. Without a Speaker, the House can't advance legislation, including any approach to extending government funding and other programs beyond the November 17 expiration. Congress was also asked by the White House to pass two supplemental funding packages, for domestic priorities and national security. The national security request of more than $100 billion was submitted to Congress on October 20. Punchbowl reported October 19, "The White House is expected to roll out a domestic-focused supplemental funding package as soon as next week, centering on disaster relief, childcare and broadband. This will be separate from the national-security supplemental … " Taiwan: The U.S.-Taiwan Expedited Double Tax Relief Act that was passed unanimously by the Senate Finance Committee in September was formally introduced in the Senate (S. 3084) October 19 by Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) and in the House (H.R. 5988) by Ways and Means Committee Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA). The updated text reflects the Finance Committee's amendment to prevent double taxation on entertainment income and athletic activities, and some other changes. Politico reported this morning, "The goal, as it has seemed for a while, is for that legislation to pass as part of a year-end tax package, as one Finance aide told Morning Tax." The Senate Foreign Relations Committee July 13 approved the separate Taiwan Tax Agreement Act (S. 1457) to authorize the President to negotiate and enter into a tax agreement with Taiwan to relieve US and Taiwanese tax residents from double taxation. Senator Ben Cardin (D-MD), who serves on Foreign Relations, said at the time he hoped members of the two committees could reach a holistic approach given the importance of Taiwan to US business. Senator Cardin is now Foreign Relations Chairman and was reported in Tax Notes October 20 as saying he and Chairman Wyden decided they will try to advance both bills because they are compatible. "But the nature of each bill — one explicitly changing the tax code and the other a tax agreement — means they may need separate vehicles, Cardin said. 'Foreign Relations has a little bit easier time than Finance because we don't need a tax bill' to attach the fix to, according to Cardin … He suggested upcoming legislation aimed at addressing competition with China and end-of-year omnibus work as possible vehicles for the Foreign Relations Committee bill." Global tax: Treasury Secretary Janet Yellen said October 16 that the US won't be ready by the end of 2023 to sign the new multilateral convention (MLC) on Pillar One of the OECD/G20 Inclusive Framework BEPS 2.0 project. While "much of the treaty has been agreed to … there are some matters that are important to the United States and other countries that remain unresolved," and these "need to be resolved before the treaty can be signed, so these processes will take into next year," Yellen said, as reported by Politico. Energy tax: Treasury, IRS, and the Department of Energy announced October 19 that applications for the Low-Income Communities Bonus Credit program under IRC Section 48(e) of the Internal Revenue Code are now being accepted. In an October 16 letter to Sec. Yellen, a group of Democratic senators led by Sheldon Whitehouse (D-RI) called for forthcoming guidance on the IRC Section 45V hydrogen tax credit to avoid "weak standards for what constitutes clean hydrogen." The letter said "45V must not be applied to hydrogen chemically derived from natural gas" nor "serve as yet another subsidy for the fossil fuel industry." An EY Tax Alert, "IRS releases details on claiming IRC Section 45L credit for new energy-efficient homes," is available here. An EY Tax Alert, "IRS releases guidance on transferring clean vehicle credits," is available here. IRA guidance tracker: This table describes select IRS guidance related to the Inflation Reduction Act.
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