Tax News & Views OBBB and AMT with Lizards Roundup

More corporations are weighing — and modeling — whether taking advantage of favorable provisions in the GOP tax law to reduce their taxable income is worth risking corporate alternative minimum tax liability, tax advisers say.

“We’ve seen a significant increase in applicable corporations projecting corporate alternative minimum tax liabilities due to reduced regular taxable income from the provisions of the OB3,” Evan Shea of Deloitte Tax LLP said August 13 on a webinar hosted by his firm, referring to the One Big Beautiful Bill Act (OBBB, P.L. 119-21).

Democratic lawmakers from Nevada are asking Treasury to address several potential issues with the tax deduction for tipped workers created by Republicans’ new tax law.

In an August 12 letter to Treasury Secretary and acting IRS Commissioner Scott Bessent, the lawmakers said they want to “ensure the successful implementation of this provision for our constituents and tipped workers across the country.”

Individual taxpayers will see a $3,752 tax cut on average next year because of the reconciliation package relative to prior law, according to a new analysis.

In a report published August 13, the Tax Foundation estimated the average individual tax cuts across each state and county from 2026 through 2035 as a result of the One Big Beautiful Bill Act (P.L. 119-21), Republicans’ $3.4 trillion reconciliation package that was signed into law by President Trump July 4.

A group of states and a New York village failed to persuade the Second Circuit to overturn an IRS final rule restricting their charitable contribution workarounds to the $10,000 state and local tax deduction cap.

In its August 13 decision in New Jersey v. Bessent and Village of Scarsdale v. IRS, the Second Circuit rejected the states' arguments against new IRS restrictions on charitable contributions that make their workarounds — which involved contributions to state-administered charities — obsolete. The court found that the IRS rule correctly interprets the tax code and is not arbitrary or capricious.

States failed to overturn a Treasury Department ban on programs that allowed residents to bypass the federal SALT cap by directing their tax payments to state-run charities and claiming a more generous deduction.

The Second Circuit rejected New York’s, New Jersey’s, and Connecticut’s arguments that the regulation contravened the federal charitable deduction statute, IRC Section 170. The rule limits the available federal charitable deduction where the donor earned equivalent SALT credits for their donation.

An Internal Revenue Service rule prohibiting charitable donation workarounds to the federal cap on state and local tax deductions will remain in place, a Second Circuit panel said Wednesday, affirming a district court determination that upheld the agency's ban on the programs.

In an opinion, the unanimous panel agreed with the IRS and the district court that arrangements enacted by New York, New Jersey, Connecticut and the Village of Scarsdale, New York, violated the implicit quid pro quo prohibition under Internal Revenue Code Section 170 , which governs deductions for charitable donations. The judges affirmed that the IRS final rule thwarting the workaround efforts was not arbitrary or capricious and the IRS did not exceed its authority in creating the rule.

A Treasury Department decision due next week threatens to undermine the financial viability of hundreds of planned clean energy projects, adding to an escalating Trump administration campaign against wind and solar power.

President Donald Trump last month ordered the department to tighten long-standing guidance used to determine whether projects can qualify for clean-energy tax credits.

The U.S. government has preemptively threatened to retaliate against countries that adopt a multilateral plan to shift the global shipping industry toward achieving net-zero greenhouse gas emissions, claiming it's "a global carbon tax" that would disfavor liquefied natural gas and biofuels.

The "Net-Zero Framework" proposed at the International Maritime Organization, or IMO, would unfairly burden the U.S., according to a statement issued Tuesday by Secretary of State Marco Rubio, Commerce Secretary Howard Lutnick, Energy Secretary Chris Wright and Transportation Secretary Sean Duffy.

Senior Trump administration officials are warning countries to withdraw their support for a global agreement to charge fees for shipping emissions, or face retaliation ahead of the measure’s likely adoption in October.

Secretary of State Marco Rubio and three other members of President Donald Trump’s Cabinet said in a statement this week that countries should be “on notice” that the administration expects their help in defeating the agreement brokered by the United Nations International Maritime Organization. They added that the U.S. will “not hesitate to retaliate” if the measure is adopted.

The Trump administration's unusual export tax-like arrangement with Nvidia Corp. and Advanced Micro Devices Inc. could be the first of many such deals, according to Treasury Secretary Scott Bessent.

The deal announced earlier this week, under which the Trump administration will collect 15 percent of the companies' revenue from the sales of certain AI chips to China in exchange for lifting export restrictions on the sale of those chips, is a “very unique solution,” Bessent acknowledged during an August 13 appearance on Bloomberg TV. The idea for the deal originated with President Trump, he said.

President Donald Trump’s controversial plan to take a cut of revenue from chip sales to China is leading to concerns that the US government will find new ways to start charging companies for a range of business activities with other countries.

Experts and people familiar with the matter said the surprise deal, in which Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from Chinese AI chip sales to the US, potentially provides a path to enter the Chinese market despite severe export controls, tariffs and other trade barriers.