Some Major Companies Will Skirt New US 15% Minimum Corporate Tax

https://news.bloomberglaw.com/daily-tax-report/some-major-companies-will-skirt-new-us-15-minimum-corporate-tax

President Joe Biden has been touting his new alternative minimum tax on the nation’s most profitable companies, even using his State of the Union address to declare: “Now, because of the law I signed, billion-dollar companies have to pay a minimum of 15%. God love them.”

But some big oil-and-gas companies like Occidental Petroleum and Marathon Oil likely won’t be subject to the new tax this year, even though they currently pay less than 15%. Other companies that aren’t yet subject to the tax, like vacation-rental giant Airbnb, may be able to slash their tax bills significantly and stay below 15% once they do have to start paying it.

The reason? Covid-19. Under the law that enacted the new tax, companies can initially factor in the big losses they suffered during the pandemic in determining whether they’re subject to the tax and how much of their income it applies to. That will enable some companies to delay or reduce the tax’s impact.