Bloomberg Tax
March 7, 2023, 7:29 PM

Treasury Open to Comments on Book Minimum Tax for M&A Transactions

Erin Slowey
Erin Slowey

Treasury is open to more approaches when determining if a company is within the scope of the corporate alternative minimum tax in merger and acquisition and restructuring transactions, a department official said Tuesday.

The corporate alternative minimum tax is a 15% minimum tax on applicable corporations or companies with over $1 billion of average annual applicable financial statement income over a three-year period.

Notice 2023-7, released last December, provided rules for calculating applicable financial statement income for merger and acquisition and restructuring transactions. In carve-out transactions, the target’s allocated AFSI is included for both the acquirer and the target group’s AFSI when determining if the company is an applicable corporation and subject to the tax.

“We didn’t really view it as giving rise to double counting,” Brett York, deputy tax legislative counsel for Treasury, said at a Federal Bar Association virtual conference.

  • If the AFS group “disposes of a portion of the group regardless of whether there is a replacement asset—for example, if distributing group spins off control—that doesn’t undo the fact that the distributing group generated the AFSI during the three-year testing period,” York said.
  • The agency wanted to minimize the incentives to restructure to avoid corporate AMT by selling or distributing subsidiaries, York said.
  • “We think if we were to take into consideration questions as to whether there’s a replacement asset or what future income might be produced by that asset, that would introduce a lot of complexity,” York said.

To contact the reporter on this story: Erin Slowey in Washington at

To contact the editors responsible for this story: Meg Shreve at; Butch Maier at

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