Four reactions from KPMG leaders on the Inflation Reduction Act

In the largest investment in energy security and climate change to date in the U.S. and a significant change in tax policy, the Inflation Reduction Act, currently passed by the U.S. Congress, moves to President Biden for his expected signature.

Leaders from KPMG’s Tax, Energy and ESG practices weigh in on the impact and significance of this new legislation.

While the Inflation Reduction Act is not the tax reform 2.0 that Biden campaigned on, it does include significant changes in tax policy, including a Corporate Alternative Minimum Tax, an excise tax on stock repurchases, and significant investment in IRS funding, which will impact individual and corporate taxpayers. The time is now for companies to get up to speed and prepare for implementation.

Jennifer Acuna, KPMG U.S. Principal, Federal Legislative & Regulatory Services, Washington National Tax

This legislation underscores the importance of meeting the energy needs of today while investing in a mix of energies that will continue to shape our future as we decarbonize. The future of energy and energy security looks much more like a mosaic of energy sources rather than one predominant source.”

Angie Gildea, KPMG U.S. National Sector Leader for Energy, Natural Resources and Chemicals

This marks perhaps the most consequential tax legislation for the energy industry to date. On the whole, the modifications, expansions, and enhancements to energy tax incentives will result in significant innovation as well as potentially more varied and accessible financing options, while also spurring investment up and down supply chains — this will be a big deal for the energy sector and beyond.

Hannah Hawkins, KPMG U.S. Washington National Tax Principal

The landmark climate provisions in this legislation are another piece of the puzzle for reducing emissions and increasing energy security in the U.S. New partnerships and funding streams will undoubtedly form, and the companies that continue to embed climate considerations into strategy stand to gain a competitive advantage as we transition to a low carbon economy.

Rob Fisher, KPMG IMPACT and KPMG U.S. ESG Leader