18.6 Tax Legislation
In 2022, two pieces of U.S. legislation with significant tax-related provisions were
enacted. The Creating Helpful Incentives to Produce Semiconductors Act of 2022 (the
“CHIPS Act,” P.L. 117-167) established an advanced manufacturing investment tax
credit under new Internal Revenue Code Section 48D. The Inflation Reduction Act of
2022 (the “IRA,” P.L. 117-169) contains various clean-energy tax incentives in the
form of tax credits, some of which include a direct-pay option or transferability
provisions.
For a discussion of challenges associated with an entity’s
accounting for tax credits available under the CHIPS Act, the IRA, or both,
including an entity’s election to account for transferable tax credits under ASC 740
or other guidance, see Deloitte’s April 3, 2023, Financial Reporting Alert and Section 12.2.2 of Deloitte’s
Roadmap Income
Taxes. For a discussion of how entities that generate such
transferable tax credits should consider the guidance in ASC 610-20, see Section 17.2.4 of this
Roadmap. For further discussion of the IRA, see Deloitte’s August 12, 2022, Tax
Alert Clean Energy Credits and Incentives in the
Inflation Reduction Act of 2022 — Details and
Observations, as well as On the Radar and Sections 3.3.4.10 and 5.7.1 of Deloitte’s Roadmap
Income
Taxes.