While there is incredible uncertainty as we move through 2022, there are a couple of major events tax teams should be tracking, as their outcomes could make a big difference for the 2022 tax landscape and well beyond.
Businesses will need to keep up with a dancing landscape of regulations across the United States, many of which will hinge on what kind of state and local funding President Biden’s infrastructure bill flows down to those governments. The uncertain economic outlook will depend on many interdependent factors and potentially result in a volatile regulatory landscape fraught with risks for businesses.
Should the SALT deduction be kept in place, states like New York and California could look for other ways to fill state and local budget gaps. We’ve already seen state and local governments (SLGs) finding creative ways to expand their tax bases in 2021 and most are targeting sales and transaction taxes.
The OECD’s proposal for a global minimum tax was meant, in part, to quell an uprising of unilateral digital services taxes in EU countries, and elsewhere. After 136 countries participating in the OECD’s Inclusive Framework agreed to a minimum tax rate of 15% for the top 100 big tech companies and to curve tax avoidance through tax havens, on October 19, U.S. officials announced they were close to reaching an agreement with the U.K., France, Italy, Spain, and Austria to suspend their DSTs when the global minimum tax comes into force.
Allow our professionals here at Wessel & Company to mitigate any tax risks you may encounter. There’s still much to be determined, so it would be foolhardy to make big predictions. But one thing is clear. Businesses and their tax teams need to watch these developments closely or risk non-compliance.