Tesla, Amazon Are in Line for a Tax Hit From Inflation Reduction Act | The Markets Café
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact
Friday, March 31, 2023
No Result
View All Result
Subscribe
  • Login
The Markets Café
en English
zh-CN 简体中文en Englishfr Françaisde Deutschhi हिन्दीit Italianoja 日本語pt Portuguêsru Русскийes Españoltr Türkçe
  • News
  • Politics
  • Markets
    • Stocks
    • Futures
    • Commodities
  • Crypto
    • News
    • Markets
    • NFT
    • DeFi
    • Explained
  • Economy
  • Finance
  • Investing
  • Forex
  • Real Estate
  • Tech
  • VideosHOT
  • Community
  • Charts
  • News
  • Politics
  • Markets
    • Stocks
    • Futures
    • Commodities
  • Crypto
    • News
    • Markets
    • NFT
    • DeFi
    • Explained
  • Economy
  • Finance
  • Investing
  • Forex
  • Real Estate
  • Tech
  • VideosHOT
  • Community
  • Charts
No Result
View All Result
The Markets Café
No Result
View All Result
  • News
  • Politics
  • Markets
  • Crypto
  • Economy
  • Finance
  • Forex
  • Investing
  • Tech
  • Videos
  • Community
Home Investing

Tesla, Amazon Are in Line for a Tax Hit From Inflation Reduction Act

by Press Room
August 15, 2022
in Investing
98 5
A A
0
21
SHARES
687
VIEWS
FacebookTwitter

Some major companies, including
Tesla
and
Amazon.
com, are likely to face higher tax bills under the $750 billion Inflation Reduction Act, which was approved in the House on Friday.

The legislation was approved in the Senate on Sunday. It now goes to President Joseph Biden for his signature. The legislation aims to cut healthcare costs and fight climate change.

The bill includes a 15% minimum cash tax on income as reported under generally accepted accounting principles. Called the “Amazon Tax,” it is expected to raise  $222 billion over 10 years and $35 billion in 2023, Chris Senyek, chief investment strategist at Wolfe Research, said in a Thursday research note. “Based on our bottoms up work across large publicly traded companies, we struggle to find how this provision will raise anywhere close to this amount,” Senyek said. 

The tax, set to take effect in 2023, imposes a 15% minimum tax rate on income as reported in GAAP financial statements. It applies to companies that report an average of more than $1 billion of pretax profits for three years. 

For companies with foreign parents, the tax will apply at the U.S. subsidiary level if there is $1 billion of consolidated profit and also more than $100 million of U.S. profits, according to the note. Senyek listed
Shopify
(ticker: SHOP) and
UBS Group
(UBS) as likely to feel the impact. 

Senyek produced a screen of 35 U.S. companies, with cash rates of less than 15%—cash paid in taxes divided by pretax financial statement income—that would potentially be affected. “To be sure, as currently written, the provision is complicated and somewhat unprecedented, making estimated impacts inherently difficult,” he wrote in the note. 

Here are 10 companies on Wolfe Research’s list that will likely face effects from the bill.

First up is Amazon.com (ticker: AMZN), which enjoyed a 7.1% median cash rate from 2019 to 2021, according to Senyek. Its estimated profit from 2020 to 2022 was $21 billion.

Tesla (TSLA), which had a median cash tax rate of 9.4% from 2019 to 2021, also made the list. The EV maker’s estimated profit from 2020 to 2022 was about $7.2 billion, Senyek said in the note.

There’s also
American International Group,
or AIG (AIG), which had a median cash tax rate of 6.1% and an estimated profit of $4.6 billion from 2020 to 2022, the note said.

Nvidia’ss (NVDA) median cash tax rate was 9.3% from 2019 to 2021, while its estimated profit was $8.4 billion 2020 to 2022. 

The  median cash tax rate for Advanced Micro Devices (AMD) was 5.2%. Its estimated profit for 2020 to 2022 was about $3 billion. 

The screen also listed three energy companies that have a median cash rate of 0% for 2019 to 2021, suggesting that they paid little in taxes in recent years, Senyek said. The three companies include
Pioneer Natural Resources
(PXD), which had an estimated profit of about $4.6 billion from 2020 to 2022;
Diamondback Energy
(FANG), with an estimated profit of $1 billion for the three years; and
California Resources
(CRC), with an estimated $1 billion in profit. 

Moderna
(MRNA) has a median cash rate of 3.6% and an estimated profit for 2020 to 2022 of $8.6 billion. 

Zoom Video Communications
(ZM) has a 7% median cash rate while it is estimated profit was $749 million.

Write to Luisa Beltran at luisa.beltran@dowjones.com

Read the full article here

Related Articles

Investing

Alibaba May Be Splitting Up, but It Will Probably Keep the Good Parts for Itself

March 31, 2023
Investing

Avidity’s stock gains after company shares new data about partial clinical hold

March 30, 2023
Investing

PacWest stock rises as it moves to the S&P SmallCap 600 from the S&P MidCap 400

March 30, 2023
Investing

New York Yankees’ YES Network launches streaming option for cord cutters ahead of baseball Opening Day

March 30, 2023
Investing

VirnetX stock rockets after declaring large special dividend, as positive outcome from Apple litigation nears

March 30, 2023
Investing

Bed Bath & Beyond stock sinks toward record low after sales warning, large equity offering

March 30, 2023

About Us

The Markets Café

The Markets Cafe is your one stope Finance, Politics and bussines news website, follow us to get the latest news and updates from around the world.

Sections

  • Commodities
  • Crypto Markets
  • Crypto News
  • DeFi
  • Economy
  • Explained
  • Finance
  • Forex
  • Futures
  • Investing
  • Markets
  • News
  • NFT
  • Politics
  • Real Estate
  • Stocks
  • Tech
  • Videos

Site Links

  • Contact
  • Advertise
  • DMCA
  • Submit Article
  • Forum
  • Site info
  • Newsletter

Newsletter

THE MOST IMPORTANT FINANCE NEWS AND EVENTS OF THE DAY

Subscribe to our mailing list to receives daily updates direct to your inbox!

  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact

© 2022 The Markets Café - All rights reserved.

No Result
View All Result
  • News
  • Politics
  • Markets
    • Stocks
    • Futures
    • Commodities
  • Crypto
    • News
    • Markets
    • NFT
    • DeFi
    • Explained
  • Economy
  • Finance
  • Investing
  • Forex
  • Real Estate
  • Tech
  • Videos
  • Community
  • Charts

© 2022 The Markets Café - All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.