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Ext. PublicationThe Tax Navigator – Supreme Court Tariff Reversal and Corporate AMT Updates
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Join Sean Muller, The Tax Navigator, as he breaks down the latest federal tax developments — from the Supreme Court’s reversal of tariffs to key updates on the corporate AMT, R&E deductions, depreciation rules and the 2026 IRS mileage rate. He also discusses how these changes may affect businesses with complex tax positions, including partnership reporting requirements and qualified production property deductions.
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©2026
Detailed Description of The Tax Navigator – Supreme Court Tariff Reversal and Corporate AMT Updates
00:00:00
Sean: We were hoping for a slow week in Congress since they were out of session, but the Supreme Court and the Treasury came through for us and gave us a lot of stuff.
00:00:08
Sean: Unless you were living under a rock, you saw the Supreme Court overturned all of President Trump’s tariffs. So, lots and lots of billions of dollars that supposedly need to be refunded to taxpayers. The Supreme Court did not offer any guidance on how those amounts were going to be refunded.
00:00:25
Sean: And as you’ve seen as well, President Trump has proposed some other tariffs. He started at 10% and then went to 15%. So, we’re still in lieu of what happens to companies there.
00:00:35
Sean: There was a simple update on business mileage. The IRS released notification on what the mileage rate is for 2026. It is 72.5 cents per mile for business miles. So, there’s helpful facts there.
00:00:49
Sean: Then there were two notices that were released that were leading into proposed regulations. One was Notice 2026-7 that deals with corporate AMT tax. Corporate AMT tax applies to businesses that have over $1 billion in revenue.
00:01:05
Sean: It doesn’t hit a big part of the world, but it does affect those of us that are doing partnership returns with corporate partners. We may have to disclose information at the partnership level that flows up to the corporation.
00:01:19
Sean: There was a big push with the OBBBA that came out with depreciation and R&E expenditures. Corporations were pushing to get a deduction for R&E expenditures after the tax deal.
00:01:34
Sean: How corporate AMT works is if you’re over $1 billion, you’ve got to pay 15% of book income. And so what was happening here with a corporate rate of 21%, corporations were getting really close to the 15% rate. If they had bonus depreciation, they had repairs, these R&E expenditures they’ve been capitalizing for three years, they wanted them added back.
00:01:55
Sean: This notice came out and actually allows taxpayers to deduct the R&E expenditures from their corporate AMT. So, in effect, they’re getting the deduction against the 15% tax.
They can also deduct repairs that would be capitalized for book purposes and a few other adjustments as well. So that’s helpful for taxpayers.
00:02:14
Sean: The other big piece that came out was a notice about tangible qualified production property and being able to expense that.
00:02:22
Sean: This qualified production property is something that came out of OBBBA, and it allows you to write off nonresidential real property. So you go build a factory that you’re going to manufacture or produce anything, you can write off the entire factory, not just the parts and stuff inside of it, and take bonus depreciation on 100% of it.
00:02:40
Sean: There are a few safe harbors in there as well. But the big downside to this provision is that if you sell the property or you stop using it within the 10-year period, you have to recapture all the bonus depreciation you took.
00:02:54
Sean: So yes, while you get to write off an asset that’s a 39-year asset immediately, if you change the purpose of that facility in the next 10 years, you have to recapture all that as ordinary income, and the entire facility becomes Section 1245 property that’s subject to recapture when you sell it.
00:03:12
Sean: We’re going to do a separate video on that piece alone just to talk about it. But until next week.
This episode of The Tax Navigator was recorded prior to publication. Some references or updates discussed may reflect information current as of the recording date.
