It was announced that Senator Kyrsten Sinema (D-AZ) has agreed to support the Inflation Reduction Act of 2022, almost guaranteeing its passage in the Senate.
“NAMA has been closely monitoring the movement of this legislation, looking for any opportunity to attach the Employee Retention Tax Credit (ERTC). However, due to the US Senate’s leadership dynamics of working so confidentially and close-knit with Senators Manchin and Sinema, no opportunity availed itself. We’re still diligently working ERTC for possible inclusion in a year-end tax bill.” – NAMA Government Affairs.
Initial findings of the bill include:
- Establishment of a commercial clean vehicle tax credit: Creates a new up-to 30% credit (not to exceed $40,000) for the cost of commercial electric vehicles and fuel cell vehicles through 2032. The credit is capped at $7,500 for vehicles with a gross vehicle weight less than 14,000 pounds, and $40,000 for all other vehicles.
- Climate incentives: Includes funds to establish several grant programs at the Environmental Protection Agency (EPA) and other agencies to reduce emissions across a range of sectors.
“These components are in line with NAMA’s high-impact advocacy agenda promoted during the 2022 Fly-In. We see this as a great opportunity to actively pursue grants or tax credits for operators to upgrade current refrigerated vending machines to new R-290 machines. Once the programs are established, we will work with Congress to seek funding/tax credits/grants to offset operator investments for upgrading vending machines and the EPA for implementation requirements that our favorable to our industry.”
- New corporate minimum tax: Establishes a 15% minimum tax on large corporations. The tax would apply to companies that average $1 billion or more in adjusted income over the past three years. This new tax is being used as a cost offset for the package and seeks to drive down the federal deficit.
Other major sections include:
- Reviving the $7,500 tax credit for personal electric vehicles.
- Creating tax credits for environmentally friendly construction projects.
- Enhancing the Internal Revenue Service’s (IRS) tax enforcement and compliance abilities.
- Capping out-of-pocket cost of prescription drugs for Medicare beneficiaries each year at $2,000.
- Providing free vaccines for Medicare beneficiaries, which include COVID-19 vaccines, shingles, and other necessary vaccines.
- Extending Affordable Care Act (ACA) premium subsidies to 2025.
“NAMA does not expect significant changes to the bill language, but will continue monitoring the package closely. It is our top priority to be a resource on this matter and keep members informed on any meaningful developments as the Inflation Reduction Act moves forward.”
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