Senate Approves $1.2 Trillion Infrastructure Bill

August 12, 2021 | Article

By Jay Heflin

The Senate approved a $1.2 trillion infrastructure legislative package (the Bipartisan Infrastructure Bill) on August 10, 2021. The bill now moves to the House of Representatives for a vote and possible amendments.

The majority of provisions included in the Senate legislation relate to direct spending by the federal government, but there are several tax-related provisions. These do not raise individual or corporate tax rates.

The revisions include:

Revival of Superfund Taxes

Prior to 1996, a tax of 9.7 cents per barrel of crude oil, and equivalent taxes on certain chemicals, was collected on their sale to fund the cleanup of Superfund sites. The Bipartisan Infrastructure Bill would restore the superfund tax with respect to most chemicals that were previously subject to the tax, except crude oil.

Cryptocurrency Reporting

The proposed legislation would treat digital currency the same as cash for required reporting of payments in excess of $10,000, clarify that digital currency is a “covered security” for broker-to-broker reporting, and make other changes.

This provision proved controversial during legislative debate. Some senators think it goes too far by forcing reporting requirements on entities that don’t broker digital assets. However, efforts to amend this provision fell short.

Modification to the Employee Retention Tax Credit

The Bipartisan Infrastructure Bill sunsets the Employee Retention Tax Credit (ERTC) after September 30, 2021, instead of December 31, 2021, as originally written. However, startup businesses that began operations after February 15, 2020, and had annual gross receipts of less than $1 million are exempt from this provision. For these entities, ERTC expiration remains December 31, 2021.

Extending the Period for Filing a Petition with the Tax Court

When the Tax Court is inaccessible, the legislation provides for an additional 14 days after the Tax Court reopens to file a petition.

It is important to note that this provision is related to all closures, not just those caused by COVID-19.

Extended Tax Filing Deadlines in Fire Management Assistance Areas

The legislation extends the IRS tax filing deadlines in Fire Management Assistance areas after significant fires.

The provision gives victims of significant fires the ability to postpone certain tax deadlines, similar to the postponement available to those affected by presidentially declared disaster or terroristic or military actions.

No Inclusion of 45C Credit

The legislation does not include the 45C credit for qualified energy property that was proposed earlier. A grant procedure targeting the same investment is included in its place.

What to Do Next

It could take weeks, if not months, before this bill becomes law. This is because the House of Representatives is not expected to vote on the bill until the fall, at the earliest. It is unclear whether the House of Representatives will further modify this legislation (for instance, by undoing the early sunsetting of the ERTC).

Have questions on how this new legislation will impact your organization?

This article is provided for general informational purposes only. It is not legal, accounting or other professional advice, as it does not address any individual facts, circumstances or concerns. Before making personal or business related decisions, please consult with appropriate legal, accounting or other qualified professionals.

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