A corporate alternative minimum tax (book minimum tax, or BMT) has been proposed for corporations with book profits over $1 billion as part of a budget reconciliation bill (the Inflation Reduction Act of 2022) that Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) released on 27 July. The provision would impose a minimum tax equal to the excess of 15% of an applicable corporation’s adjusted financial statement income (AFSI) over the corporate alternative minimum tax foreign tax credit (AMT FTC) for the tax year.
The BMT would increase a taxpayer’s tax only to the extent that tentative minimum tax exceeds regular tax plus base erosion and anti-abuse tax (BEAT).
The BMT would be effective for tax years beginning after 31 December 2022.