Book Minimum Tax Repeal Act

Bill Number

S. 796

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-02-27: Read twice and referred to the Committee on Finance. (text: CR S1431)

Last Updated

2026-05-20T15:54:39Z

AI-Generated Summary

Purpose

The "Book Minimum Tax Repeal Act" (S. 796) aims to eliminate the corporate alternative minimum tax (CAMT), a tax designed to ensure large corporations pay a minimum amount of federal income tax based on their adjusted financial statement income (essentially, their book income as reported in financial statements). By repealing this tax, the bill seeks to simplify corporate taxation and reduce the tax burden on businesses.

Key Provisions

• Repeal of CAMT: Amends Section 55 of the Internal Revenue Code (IRC) to exclude corporations from the alternative minimum tax (AMT). The AMT will now apply only to non-corporate taxpayers (e.g., individuals), with rates of 26% on the first $175,000 of taxable excess (alternative minimum taxable income minus an exemption amount) and 28% on amounts above that, reduced by foreign tax credits.
• Adjustments to Related Tax Rules:
• Treats corporations as having zero tentative minimum tax for purposes of the general business credit (under IRC Section 38), allowing full use of credits without AMT limitations.
• Removes references to CAMT in various IRC sections, including those governing corporate tax rates (Section 11), income tax computations (Section 12), credit limitations (Section 53), and adjustments for financial statement income (Section 56A).
• Conforming Amendments: Strikes or modifies provisions in over a dozen IRC sections to eliminate CAMT-related rules, such as those affecting foreign corporations (Sections 882 and 897), estimated tax payments (Section 6655), and refund claims (Section 6425). This includes removing subsections on book income adjustments and foreign tax credits specific to CAMT.
• Effective Date: Applies to taxable years beginning after December 31, 2024.

Significant Changes to Existing Law

• The CAMT was introduced in the 2022 Inflation Reduction Act as a 15% minimum tax on corporations with over $1 billion in adjusted financial statement income, targeting book-tax differences where companies report profits to investors but claim deductions to lower taxable income.
• This bill fully repeals that tax, reverting corporate AMT rules to pre-2022 standards where corporations were generally exempt from AMT (though a prior version existed until 2017).
• It eliminates the need for corporations to calculate and report "adjusted financial statement income," streamlining compliance but removing a revenue-raising mechanism estimated to generate billions annually.

Potential Impacts

• On Government Agencies: The Internal Revenue Service (IRS) would see reduced administrative workload in auditing and processing CAMT-related filings, but the federal government could face revenue losses (potentially $200-300 billion over a decade, based on prior estimates), affecting funding for public programs.
• On Citizens: Indirectly benefits shareholders and consumers through potentially lower corporate costs, which might lead to higher stock values or reduced prices; however, it could exacerbate income inequality if perceived as favoring wealthy corporations over individual taxpayers.
• On International Relations: Minimal direct impact, though repealing CAMT might align U.S. tax policy more closely with global norms (e.g., OECD minimum tax pillars), potentially reducing incentives for multinational corporations to shift profits abroad.

Main Stakeholders Affected

• Corporations: Primary beneficiaries, especially large ones (e.g., those with $1 billion+ in book income), as they avoid the 15% minimum tax and related compliance costs.
• Shareholders and Investors: Gain from potential increases in corporate after-tax profits and dividends.
• Small Businesses and Individuals: Largely unaffected directly, but non-corporate taxpayers (e.g., individuals, partnerships) remain subject to AMT rules.
• Federal Government and Taxpayers: IRS and Treasury face enforcement simplification but revenue shortfalls; general taxpayers may see indirect effects on government services.

Notable Legal, Constitutional, or Political Implications

• Legal: Simplifies the IRC by removing a complex layer of tax computation, potentially reducing litigation over book-tax adjustments; no direct constitutional challenges anticipated, as tax policy falls under Congress's broad authority (Article I, Section 8).
• Constitutional: Neutral, as it adjusts statutory tax code without altering core taxing powers.
• Political: Could spark debates on corporate tax fairness, with supporters viewing it as pro-business relief and critics arguing it undermines efforts to ensure large firms pay their "fair share." As a Senate-introduced bill referred to the Finance Committee, passage would require bipartisan support amid ongoing fiscal policy discussions.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Barrasso, John [R-WY]

Cosponsors (8)

Sen. Crapo, Mike [R-ID], Sen. Lankford, James [R-OK], Sen. Cassidy, Bill [R-LA], Sen. Daines, Steve [R-MT], Sen. Blackburn, Marsha [R-TN], Sen. Ricketts, Pete [R-NE], Sen. Risch, James E. [R-ID], Sen. Lummis, Cynthia M. [R-WY]

Recent Actions

• 2025-02-27: Read twice and referred to the Committee on Finance. (text: CR S1431)
• 2025-02-27: Introduced in Senate

Bill Versions

• Book Minimum Tax Repeal Act — issued 2025-02-27 — PDF (5 pages)