Infrastructure Investment & Jobs Act
On November 15, 2021 President Biden signed the bill into law known as the Infrastructure Investment and Jobs Act. This $1.2 Trillion Bill will allocate $500 million to new spending on public transit, highways, roads, and utilities. The act mainly focuses on tax changes regarding private activity bonds, excise taxes and taxation of cryptocurrency transactions. Where will the money come from? There are currently two proposed ways to increase revenue within the act: Extend funding stabilization requirements for retirement plans and early termination of the employee retention credit for businesses forced to close due to the Covid-19 pandemic. The act also calls for increased reporting requirements of cryptocurrency transactions, specifically, transactions by brokers of cryptocurrency. There are concerns that many cryptocurrency transactions are flying under the radar and not being reported as taxable income, but there is hope that taxation of these excluded transactions should offset some of the cost of the act.
In relation to private activity bonds, there are two types of projects being added to the tax exemption list: qualified broadband projects and qualified carbon dioxide capture facilities. There will also be an extension of excise taxes related to infrastructure through 2028 including taxes on fuel, diesel, retail of heavy trucks and trailers, along with tires. There are also some notable tax changes regarding contributions to water and sewage utilities that were eliminated by the the Tax Cuts and Jobs Act of 2017 that are being restored. Unrelated to infrastructure there are changes to tax procedures connected to the mandatory extension of deadlines for time-sensitive acts, the authority to change deadlines due to federally declared disasters expanding to “significant fires”, and increasing the list of items that can be extended to taxpayers who serve in a combat zone. All in all, the act should help stabilize some of the country’s infrastructure and provide a clearer picture for certain industries' tax procedure while setting standards for parts of the tax code that have been neglected.
By: Federico Marsico, Client Relationship Manager at CROFT & FROST
Sources:
https://answerconnect.cch.com/app/acr/home/federal
https://www.congress.gov/bill/117th-congress/house-bill/3684/text