US Treasury set to ease 15% minimum tax, enabling companies to claim full Trump-era R&D deductions

Core Viewpoint - The Treasury Department is set to release new corporate tax guidance that will provide significant tax savings for companies, particularly benefiting those in research-intensive sectors like technology and pharmaceuticals [1][3]. Group 1: Tax Guidance and Implications - The forthcoming tax guidance aims to resolve issues related to the Biden-era 15% minimum tax on corporations earning at least $1 billion, which has hindered businesses from fully utilizing R&D deductions [2][5]. - The guidance is expected to allow companies to claim retroactive R&D deductions, which are estimated to be worth $67 billion, without triggering the minimum tax for many firms [5][6]. - Companies such as Salesforce Inc. and Qualcomm Inc. are among those likely to benefit from these tax savings [1]. Group 2: Impact on Corporations - The new guidance is seen as a win for large corporations, providing additional tax benefits on top of those already included in Trump's tax bill, which restored full upfront deductions for R&D investments [7]. - Other companies like Airbnb Inc., Broadcom Inc., and Applied Materials Inc. have indicated that their large deductions could trigger the 15% corporate alternative minimum tax, affecting their ability to claim tax credits [6]. Group 3: Recent Changes and Legislative Context - The Treasury has made several recent changes to weaken the 15% minimum tax, including creating more lenient rules and granting exemptions to certain industries [8]. - Tax policy experts note that the Treasury has considerable leeway to implement changes due to the law establishing the corporate minimum tax [9]. Group 4: Potential Political Reactions - The upcoming guidance is likely to face criticism from progressive Democrats, particularly those opposed to limiting the corporate minimum tax [11].