Leaving the corporate AMT in place would effectively put that lower rate off-limits, though. The provision doesn’t jibe with several other planned deductions or tax breaks, suggesting that the AMT is bound to be reworked by House and Senate negotiators as they meet in a so-called conference committee to fashion a compromise.
Retaining the corporate AMT would also affect companies’ ability to use full and immediate write offs for capital spending on plants and equipment -- which the legislation’s backers have billed as one of its main pro-growth provisions. That deduction would be available for five years -- and then, under the Senate bill, it would phase out in later years to lower levels. Taking such deductions isn’t possible under the current corporate AMT rules, which apply far more restrictive limits on depreciation.
Because the AMT “doesn’t seem to work with some core elements of the overall tax reform package, it can’t survive conference in its current form,” said Michael Mundaca, the co-leader of the Ernst & Young Americas Tax Center.
Only 10,222 corporations filed returns for 2013 showing that they owed the corporate AMT, according to the latest Internal Revenue Service data. That’s less than 0.2 percent of the 5,887,804 corporate returns filed that year.
This article was provided by Bloomberg News.