After months of negotiation, on Aug. 10, 2021, the U.S. Senate voted 69-30 to pass the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act (IIJA), the largest investment in infrastructure the United States has seen in over a century. The bill’s focus is to fund the improvement of roads, bridges, mass transit, broadband, water and wastewater across the country. Within the countless infrastructure improvements are tax-related provisions businesses should continue to be vigilant of as the bill heads to the House of Representatives.

Employee Retention Credit Ending After Q3

The Employee Retention Credit (ERC) was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 as a response to the COVID-19 pandemic. The refundable tax credit was meant to incentivize business owners to keep their workers employed during the pandemic and was set to expire at the end of 2021. The IIJA would end the ERC a quarter early to use the remaining funding (nearly $67 billion) as a source of financing for its many new infrastructure projects. Eligible employers would no longer benefit from the credit after Sept. 30, 2021, with the exception of recovery start-up businesses (those that started a business after Feb. 15, 2020, with annual sales of less than $1 million).

Cryptocurrency Reporting Requirements

The new legislation also would impose Internal Revenue Service (IRS) reporting requirements for brokers of cryptocurrency, who are considered as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person." The bill also enforces penalties for those failing to report. This reporting requirement would contribute nearly $28 billion toward the funding of the IIJA.

Reinstatement of the Superfund Tax

The Superfund tax (enacted in 1980 and expired in 1995) was an excise tax on the sale, import or use of certain chemicals or taxable substances made from these chemicals. The new legislation would reinstate Superfund taxes for specified chemicals from July 1, 2022, to Dec. 31, 2031, and contribute nearly $14.5 billion toward the IIJA’s cleanup of highly contaminated waste sites. It also would increase the rate on taxable substances if importers do not disclose information to the U.S. Department of the Treasury Secretary at 10%.

What’s Next?

The IIJA’s next stop is the House of Representatives, which is currently on its August summer recess. The bill will surely be a priority upon their return, where, if approved, it will be sent to President Biden’s desk for signature. Doeren Mayhew will continue to keep you posted on the status of the IIJA. In the meantime, contact us if you have questions about how your business may be impacted by the bill’s tax implications if it is signed into law.