Key Takeaways
- Senator ignites debate on AI and data center taxes.
- IRS issues relief on sovereign wealth funds.
- Commenters bring the heat on fuel credit ambiguity.
- NYT has a deep dive on new corporate public disclosures of global tax payments.
- "Blue Book" on One Big Beautiful Bill Act is out, just in time for summer.
- National Paper Clip Day!
AI Taxes Coming?
Why We Need to Tax AI - Sen. Elizabeth Warren, TIME Magazine:
We can't be afraid to consider even bigger and bolder proposals to tax AI too, including ideas that sound radical today but may quickly become common sense. Because here’s what I see clearly: if we overhaul our tax code and tax AI, we can use that money to build a country that works for everyone. A country where health care is treated as a human right, where every American is guaranteed a good job, and where education isn’t a privilege reserved for the wealthy. That’s what I believe taxing AI promises.
Elizabeth Warren’s AI plan is the same as her plan for everything else - Washington Post Editorial Board:
The reason would be the government’s own policies that ensured there would be less to go around, but that wouldn’t matter. The politicians’ solution would be some kind of government incentives to spur more AI investment and adoption.
Ohio Governor Pauses Data Center Tax Breaks - Maria Koklanaris, Law360 Tax Authority ($):
On Wednesday, DeWine, a Republican, said he told the chair of the Ohio Tax Credit Authority to wait on any new requests for tax breaks while a General Assembly committee examines the growth of data centers in the state.
DeWine's move came in light of the Ohio Department of Taxation reporting that the state had about $1.6 billion in 2025 forgone sales tax revenue because of the tax breaks, whereas the state had projected that it would have about $136 million.
Treasury Reg Revision Helps Sovereign-Wealth Investors in US - Michael Rapoport, Bloomberg Tax ($):
Treasury and the IRS proposed new regulations that would “grandfather in” existing investments so that they won’t be subject to aspects of foreign-government income regulations under Section 892 that were proposed in December.
The proposed change is a response to “the concerns of many taxpayers” and aims to “support current and future sovereign wealth fund investment in the United States,” IRS CEO Frank Bisignano said in a statement.
Safe Harbor Ambiguity Seen as Clouding Clean Fuel Credit - Mary Katherine Browne, Tax Notes ($):
During a May 28 public hearing on the proposed regulations (REG-121244-23) for the section 45Z credit, witnesses representing the fuel production and agricultural sectors urged Treasury and the IRS to resolve safe harbor ambiguities, clarify supply chain verification requirements, and retract a process fuel prohibition they said exceeds the agency's statutory authority.
Established by the Inflation Reduction Act, the section 45Z credit amount is 20 cents per gallon for nonsustainable aviation fuel and 35 cents per gallon for sustainable aviation fuel. For facilities that satisfy the prevailing wage and apprenticeship requirements, the credit jumps to $1 per gallon for nonsustainable aviation fuel.
See Eide Bailly Business Credits and Incentives for more in this area.
Another Tax Bill Still Possible?
Hill Staff Say Bipartisan Tax Deal Could Still Happen - Macon Atkinson and Chris Cioffi, Bloomberg Tax ($):
Ji Prichard, tax counsel for House Ways and Means Committee Democrats, said there was appetite for a bipartisan bill that builds on previous efforts like the 2022 SECURE 2.0 retirement law, which included a saver’s match and changes to the Thrift Savings Plan.
Global Tax Intrigue
Trump Clears Way for Corporate Tax Dodge Hidden in the Fine Print - Jesse Drucker and Dylan Freedman, The New York Times:
A New York Times review of securities filings from nearly 500 companies showed that they avoided taxes by attributing hundreds of billions of dollars in earnings to low- or no-tax foreign locales like Cyprus, Bermuda, Switzerland and the Cayman Islands. Often, corporations funneled the profits through subsidiaries in places where they had no employees, offices or customers.
Tax experts might quibble with the cause-and-effect implied here--the Trump executive order signaled the direction of administrative policy, but only Congress could have fully applied the OECD's minimum tax. Under both presidents Biden and Trump, it has so far declined to do so.
Speaking of the OECD...
OECD Teases New Global Tax Safe Harbors in Updated Guidance - Ryan Hogg, Bloomberg Tax ($):
The Organization for Economic Cooperation and Development added new details to its Consolidated Commentary to the Global Anti-Base-Erosion Model Rules from the last update in May 2025, reflecting the publication of the Side-by-Side Package.
As part of the OECD Inclusive Framework’s two-pillar framework addressing the tax challenges arising from the digitalization of the global economy, member jurisdictions agreed to tax large multinationals a minimum 15% corporate income tax wherever they book income.
Italy’s Finance Police Focus on Influencers, Online Tax Evasion - Matteo Rizzi, Tax Notes ($):
US companies operating in Switzerland must still pay the country’s 15% minimum tax under the agreement, but they can avoid it by relocating to countries that haven’t implemented a similar measure, which could disadvantage the country, said Marc-Antoine Bree, project manager for tax policy at Switzerland’s Federal Tax Administration.
Eide Bailly International Tax.
From Carter’s Hike to Trump’s Holiday: The Changing Politics of the Gas Tax - Joseph J. Thorndike, Tax Notes ($):
Important caveat: Only part of the savings from a gas tax holiday is likely to show up in the form of lower pump prices. “Consumers would see roughly 60 to 72 percent of the tax savings at the pump,” according to the Penn Wharton Budget Model, “with the remainder captured by suppliers."
Weaponization Fund Fallout
State Dems race to tax payouts from Trump's 'anti-weaponization' fund - Bernie Becker, Nick Reisman, Shia Kapos, Tyler Katzenberger and Daniel Han, Politico:
“I have no problem with there being consequences for people who accept that money,” Hochul told reporters.
Democrats have been accusing Trump of using the Oval Office to fill the wallets of his family and friends for months now. The new barrage of tax proposals, however, shows that few of the president’s actions have whipped up this much anger among Democrats — from lawmakers accusing the administration of setting up a “slush fund” for people who participated in the Jan. 6, 2021, attack on the U.S. Capitol, to Bruce Springsteen pausing his three-hour concert in Washington on Wednesday night to call the fund “an American outrage.” Along with California and New York, similar proposals have cropped up in Illinois and New Jersey, with more states expected to follow.
Blogs & Bits
Just in time for summer beach reading, the Joint Committee on Taxation released its "General Explanations" of the One Big Beautiful Bill Act's tax provisions--often called the "Blue Book." The report outlines potential technical corrections to the bill, but don't expect Congress to act swiftly in the current climate.
Speaking of the hardworking scorekeepers, William McBride of the Tax Foundation takes a moment to praise the Congressional Budget Office for providing "the most comprehensive, rigorous, and up-to-date analysis" of the economy and national debt situation.
And Kay Bell of Don't Mess With Taxes on the new IRS apps for the OBBBA's Trump Accounts.
Check out our International and State/Local roundups for more of this week's tax news.
What day is it?
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It's National Paper Clip Day! Even if you never use them anymore, take a moment to remember this useful item--if only so kids will know what the "Attach" icon means.
