U.S. Treasury Proposes 15% Corporate Minimum Tax on Firms with $1 Billion Profits, Generating $250 Billion Over 10 Years

Sep 12, 2024, 12:47 PM

The U.S. Treasury Department has introduced a proposal for a 15% Corporate Alternative Minimum Tax (CAMT) aimed at corporations with annual profits exceeding $1 billion. This tax would limit the use of deductions and credits, potentially generating more than $250 billion in U.S. revenues over 10 years from about 100 of the largest and most profitable companies. The Treasury estimates that these companies would otherwise pay an average effective federal tax rate of 2.6%, with about 60 firms paying less than 1% and 25 paying zero. The proposed regulations clarify how the new corporate book-income tax will be applied and calculated, with companies required to comply with the minimum tax for the 2023 tax year. However, the latest rule clarifications are expected to be effective for the 2024 tax year. Public comments on the proposal are open until December 12, with a hearing set for January 16, 2025. The tax is expected to generate $20 billion in 2025.