Input Stories

New guidance on the Corporate Alternative Minimum Tax, released this week by the Treasury Department and IRS, represents “a step toward fixing [a] fundamentally unworkable regime,” the NAM said on Wednesday.

What’s going on: The agencies’ new guidance was a priority for the NAM and enables companies subject to CAMT to claim the full value of their research deductions over the coming years, while introducing a number of other modifications to CAMT that will help minimize the burden imposed by the 15% minimum tax.

• “The Corporate Alternative Minimum Tax has threatened manufacturers’ ability to raise wages, hire workers and invest in their communities since it was enacted in 2022,” the NAM said.

The details: The agencies’ interim guidance builds on the victory of last summer’s One Big Beautiful Bill Act.

• “In particular, the proposed changes to protect H.R. 1’s restoration of immediate expensing for R&D costs will ensure manufacturers are not penalized for their commitment to making investments that drive innovation,” the NAM continued.
• The guidance lets businesses take additional deductions to reduce their tax bills under the CAMT. Spending on maintenance and repair can be deducted from income immediately rather than over a period of years (Bloomberg).

Why it’s critical: Manufacturers conduct more than half (52%) of all private-sector research, and some 80% of manufacturers say that artificial intelligence innovation will be key to maintaining or expanding their business by the end of the decade, according to the NAM.

• “Manufacturers called for this critical change, and we thank Treasury for taking this important step to support manufacturing innovation and ensure the continued success of H.R. 1 for our industry,” NAM Managing Vice President of Policy Charles Crain said.

NAM in the news: The NAM’s response was cited in POLITICO’s Morning Tax newsletter (subscription), Accounting Today and twice by Bloomberg.