Detroit Free Press: Boysie Billings on corporate tax breaks

Michigan's two biggest public utilities — DTE Energy and Consumers Energy — were among 55 publicly traded corporations that paid $0 in federal corporate income taxes last year, according to a recent report by a Washington D.C. think tank. The analysis, released this month by the Institute of Taxation and Economic Policy, found that because of special provisions in the 2020 CARES Act, as well as previous advantages available under tax law, DTE Energy and Jackson-based CMS Energy Corp. had effective federal tax rates in 2020 that were less than zero, or minus-16% for DTE and minus-4% for CMS. It has become more common to see companies paying $0 in federal income tax since the 2017 Trump tax overhaul took effect and repealed the corporate alternative minimum tax, according to accounting professor Boysie Billings at the Wayne State University Mike Ilitch School of Business. The corporate alternative minimum tax was a parallel system designed to make sure corporations paid some amount of federal tax, even if they qualified for various deductions and tax breaks. The tax was set at 20% and kicked in if a corporation's tax bill would otherwise fall too low. "They got rid of it, and so what you’re seeing today is there are no backstops" for how low tax bills can go, Billings said. "You can go much, much lower than would otherwise have been the case.”

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