Recent Legislative Progress on Several Key Tax Issues

CHIPS and Science Act of 2022 

On July 28, 2022, the U.S. Congress passed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022. This legislation is part of an effort to promote domestic manufacturing of semiconductor chips. The bill now heads to President Biden with the expectation of being signed into law.

Established under the CHIPS Act is the advanced manufacturing investment credit, which incentivizes the manufacturing of semiconductors, as well as specialized tooling equipment required within the manufacturing process. Eligible taxpayers will have available a tax credit of up to 25% of qualified costs for certain property placed in service after December 31, 2022, and for which construction begins before January 1, 2027.

Additional highlights of the CHIPS and Science Act of 2022 include funding for domestic manufacturing development and R&D programs, and support to focus on expanding U.S. innovation in technology development and the mobile broadband market. Read this Fact Sheet prepared by the Semiconductor Industry Association for more details about the benefits of the CHIPS Act.

Breakthrough on Budget Reconciliation Bill

While the current focus for Congress is to get the CHIPS Act signed into law, recent progress has also been made on a revised budget reconciliation bill, entitled the Inflation Reduction Act. This legislation would cover several key tax provisions, including the implementation of a 15% corporate minimum tax, adjustment to the carried interest holding period rules and changes to certain Medicare regulations.

Negotiations continue among legislators, but resolution is expected in the near future, and a first vote in the Senate is scheduled for August 6. Democrats are aiming to fast-track the bill through a budget reconciliation process which will allow them to pass the legislation without the threat of a Republican filibuster. Read this NY Times article for further analysis of the current bill.

The tax professionals at Grossman Yanak & Ford LLP will continue to monitor the details of these and future tax legislative changes in the coming months. If you need assistance with your individual or corporate tax needs, please be sure to reach out to us at 412-338-9300.

Joe Rys

Joe Rys

Joe has over six years of public accounting experience. Since joining GYF in 2019, Joe has served a range of corporate and individual clients. In addition to tax compliance, he often engages in various special project work including fixed asset depreciation analyses, quarterly and annual tax projections, state sales tax issues and various payroll tax assistance.

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