Around the Tax World- May 27, 2022 - Think Outside the Tax Box

Check out what’s happening all around the world of tax!

Twice per month, we post our “Around the Tax World” feature. This highly curated, concisely written feature acts as your own personal aggregator of all the news happening in and around the world of tax. Your days of endless scrolling and combing the internet for the tax stories of the day ends now because we’re doing that work for you!

Around the Tax World is just one small feature included in a Think Outside the Tax Box subscription. Subscribe today and start enjoying our hundreds of exclusive articles, live webinars, Client Alerts, private Facebook page, and more!


The global minimum tax deal struggles to move toward implementation after recent G-7 meetings focused attention instead on Ukraine and issues of global food insecurity and inflation.

At the political forum, US Treasury Secretary Janet Yellen continued to advocate for the tax plan against concerns from some US legislators and international leaders who fear the tax will make their countries less economically competitive. The 15% global minimum tax rate is aimed at preventing multinational firms from avoiding taxation by moving to countries with lower tax rates.

 Toyota is reaching the limit on electric vehicle tax credits as it nears 200,000 plug-in hybrids sold—the maximum number of vehicles, per manufacturer, that can receive the full federal tax break. The US government currently offers a tax incentive of up to $7,500 for qualifying electric vehicles. After an automaker hits the 200,000 sales mark, the credit phases out to zero over the next year. Toyota is on track to become the third automaker, after Tesla and General Motors, to break this threshold.


US technology and innovation sectors may see tax breaks in new bill aimed at reducing reliance on China

The US Congress is in the process of negotiating a bill that could provide more than $50 billion in grants for semiconductors, also known as “chips,” which can be found in products like computers, household appliances, and medical equipment. Some lawmakers are advocating for the addition of a 25% tax credit for investments in domestic chip manufacturing, research and development, and related efforts.

The Bipartisan Innovation Act—which merged the American COMPETES Act passed by the House with the United States Innovation and Competition Acts passed by the Senate—is aimed at protecting US operations from supply chain disruptions in China and other countries acting as major suppliers. The bill proposes government subsidies to increase semiconductor production in the US and prevent future shortages for industries like automotive and electronics due to reliance on foreign manufacturers. The US House and Senate are in ongoing discussions to reconcile the proposals put forward by both chambers.

Meanwhile, impacted businesses are hoping to see the legislation shift from one-time grants toward recurring tax incentives. Some industry executives have expressed a preference for the House version of the bill because the tax incentives would apply to the broader supply chain rather than just manufacturers. Additionally, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the country’s largest federation of unions, is protesting what it considers to be “pro-China” provisions in the Senate version of the bill, such as lowered tariffs or tariff exclusions for certain Chinese goods.

The Semiconductor Industry Association (SIA) estimates that US semiconductor manufacturing capacity has decreased by about 25% since 1990 due in part to incentives offered by foreign governments that draw manufacturing away from the US and a plateau in research and development investment by the US government. President Joe Biden has been vocal in his support of the Bipartisan Innovation Act and the need to take action swiftly to keep pace with China and foreign competitors in technology and innovation. However, congressional sources estimate that it may take months for a final version of the bill to be decided upon.


Minnesota legislators plan to eliminate state taxes on Social Security income… as part of a $4 billion tax cut package that could become the largest in the history of the state. The removal of the tax on Social Security checks would provide relief to an estimated 460,000 Minnesota residents. Minnesota would join 37 other states in the US that do not tax Social Security benefits, including those states that do not tax income at all. This change would cost the state $510 million in the first year and $1.1 billion over the following two years.

The tax proposal would also reduce income taxes for 2.6 million Minnesotans, particularly by cutting the lowest tax bracket down to 5.1% from 5.35%. Additionally, the bill includes a child and dependent care credit, expands the K-12 education credit, provides tax relief for renters, and adds property tax cuts amounting to $600 million. Absent from the bill is Governor Tim Walz’s proposal to offer direct tax rebates to residents.

The potential roadblock to negotiating and passing a final bill is reaching agreement on a spending plan for education, health and human services, and public safety. Minnesota legislators are aiming to pass a budget alongside the tax bill, but contention between Republicans and Democrats on key initiatives like police funding could delay this legislation.

Connecticut parents are soon to benefit from the new state child tax rebate… amounting to $250 per child for up to three children. The credit is available to residents who claimed at least one dependent child (age 18 or under) on last year’s federal tax return. Additionally, to receive the maximum rebate, taxpayers must fall within these annual income guidelines:

  • $100,000 or less for single or married filing separately
  • $169,000 or less for heads of household
  • $200,000 or less for married filing jointly

Residents who exceed these income thresholds may still be eligible for a reduced rebate. To receive the rebate, taxpayers must apply to the Connecticut Department of Revenue Services between June 1st and July 31st of this year. Checks will be issued starting in late August. This initiative is meant to provide relief to over 600,000 families after the expiration of the federal child tax credit.

Overall, Connecticut has included over $600 million in tax relief as part of their budget, including cuts to property and car taxes, a gas tax suspension, and other benefits aimed at lower and middle-income households.


The IRS is expected to pay interest to taxpayers with delayed tax refunds. For taxpayers who filed by the federal deadline, the IRS is legally required to process a tax refund within 45 days or to pay interest for each day that your tax refund is delayed. Starting in July, the agency will begin issuing payments amounting to 5% on delayed individual tax returns, 4% on corporate tax returns, 5% on underpayments for individuals, and 7% on large corporate underpayments. In the last seven years, the federal government has paid almost $14 billion in refund interest, which includes an estimated $3.3 billion in fiscal year 2021 alone.

The IRS reports that 90% of refunds are issued within 3 weeks. However, the IRS has faced a now-famous backlog of unprocessed returns in the aftermath of pandemic-related staffing and funding shortages and increased tax complexity amid the many new benefits and legal changes of the COVID-19 era. One source says that the IRS still has 13 million unprocessed tax returns and over 26 million tax returns requiring follow-up action. Staffing issues also mean that taxpayers are having difficulty reaching an IRS representative for support needs.

Homeowners across the US are seeing significant property tax increases. With the pandemic era came an unexpected housing market boom. As a result, the valued price of a typical US home rose by 37% since February 2020. This year, as county and city officials send out updated property assessments, many homeowners are seeing notable increases in property taxes and therefore increased financial strain in a time of inflation.

In 2021, property taxes reached record highs in certain regions, particularly in New York, Connecticut, New Jersey, and California—the states with the wealthiest counties. However, the average property tax assessment rose only 1.8% last year compared to the actual value of a single-family home, which rose 16%. In some cities, the spike was much higher: a 31% increase in Philadelphia, 18% in Milwaukee, and 40% in Knox County where Knoxville is situated.

Why the disparity between the increase in home values and the change in property taxes? Tax experts note that a higher property assessment does not always mean increased taxes. The determining factor is whether your assessment increased by a higher percentage than the average home in your city, town, or county. Also, since property reassessments might occur anywhere from yearly to every several years, depending on where you live, this gap in time could explain why the housing market boom is just now revealing its impact on property taxes.

Recent Highlights

Wondering what you missed in our last newsletter? Check out our latest exclusive articles here:



  • Scroll to Top

    Thank you for subscribing to Tax Law Pro

    You are granted a non-exclusive, non-transferable, revocable license to access and use Tax Law Pro by Think Outside the Tax Box, Inc., strictly according to these terms of use.