When it comes to the new minimum tax, you can bet that Berkshire Hathaway and Amazon won’t be happy. In fact, according to projections from Bloomberg, these two corporations could be hit with some of the highest minimum taxes on record due to their extreme market caps in comparison to previous minimum tax laws. Here’s what you need to know about the new minimum tax and how it might affect Berkshire Hathaway and Amazon stock prices moving forward.
Only around 78 corporations will be affected by the new 15% corporate minimum tax introduced by the Inflation Reduction Act, with Berkshire Hathaway and Amazon bearing the worst financial impact.
The tax, which takes effect in January, was mapped onto businesses’ 2021 earnings in a research by the University of North Carolina Tax Center using earlier securities filings.
According to the researchers, 78 companies would have lost $31.8 billion in 2021 if the 15% requirement had been in place. Based on projected earnings through 2021, Berkshire took the top spot with a predicted payout of $8.33 billion, followed by Amazon with $2.77 billion.
The analysis highlights the drawbacks of focusing just on public firm data from a particular year. The researchers acknowledged that these projections may vary, particularly when business operations change as a result of the tax in 2023.
Along with the remainder of the Inflation Reduction Act, President Joe Biden signed the minimal book tax into law in August. Companies making more than $1 billion annually are the focus of the tax.
According to a prior assessment by the Joint Committee on Taxation, it would have an impact on 150 or so businesses, with the industrial sector bearing the brunt of the costs. The $34 billion in income forecast by the nonpartisan JCT was also somewhat higher than the UNC revenue projection for 2021.
Ford would be required to pay the next-highest taxes, per the report.
according to their 2021 financial statements, each of which would owe more than $1.2 billion in payments.