Overview
Title
To amend the Internal Revenue Code of 1986 to deny certain green energy tax benefits to companies connected to certain countries of concern.
ELI5 AI
The "NO GOTION Act" is a rule that stops certain companies from getting special money help for green energy if they are linked to countries like China or Russia, because those places might not be friendly to the U.S. or have bad governments.
Summary AI
The bill, titled the "No Official Giveaways Of Taxpayers’ Income to Oppressive Nations Act" or the "NO GOTION Act", aims to revise the Internal Revenue Code of 1986. It seeks to prevent certain companies from receiving green energy tax benefits if they are connected to countries subject to U.S. concerns, such as China, Russia, Iran, North Korea, Cuba, Venezuela (while under President Nicolas Maduro), and Syria. Companies considered "disqualified" under this bill might be those controlled or influenced by these governments or organized under their laws. The changes would apply to tax years beginning after the bill is enacted.
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AnalysisAI
Summary of the Bill
This legislative proposal, introduced to the U.S. Senate, seeks to modify the Internal Revenue Code of 1986. It introduces a provision that denies certain green energy tax benefits to companies associated with specific "countries of concern." The countries listed in this bill include China, Russia, Iran, North Korea, Cuba, Venezuela during Nicolás Maduro's presidency, and Syria. The primary intent is to restrict any direct or indirect affiliations with governmental or significant corporate entities from these nations in terms of receiving green energy tax credits.
Significant Issues
One of the critical issues with the bill is the term "countries of concern." This designation could be perceived as politically driven, with its list of countries creating tensions in diplomatic and economic spheres due to a lack of detailed rationale for each inclusion. This approach may be seen as targeting specific nations without considering current geopolitical contexts.
Another significant aspect is the complexity and potential ambiguity surrounding the definition of a "disqualified company." The intricacy of determining corporate control or ownership links to these countries could lead to challenges in identifying which companies fall under this category. This complexity could result in inconsistent implementation and possible legal challenges.
The bill's language concerning "green energy tax benefits" does not explicitly define these benefits beyond listing specific sections of the tax code. This could lead to misunderstandings about the precise nature of the denied benefits, complicating compliance for companies and enforcement for authorities.
Impact on the Public
For the general public, the bill's passage could align with national interests concerning economic independence in green energy sectors. It might resonate with those who support minimizing economic reliance on potentially adversarial nations. However, this stance may result in unintended consequences, such as potential increases in the costs of green energy technologies if multinational corporations restrict operations in response to the bill.
Furthermore, the bill could contribute to broader geopolitical narratives and perceptions of U.S. foreign policy decisions. As international trade policies evolve, consumers might experience indirect impacts such as price fluctuations due to changes in supply chains and market dynamics.
Impact on Specific Stakeholders
For businesses, particularly in the green energy sector, this bill could necessitate significant operational adjustments. Companies may need to reevaluate their corporate structures and affiliations to ensure compliance, potentially leading to costly reorganization efforts. Those directly engaged with the countries of concern might be adversely affected by the withdrawal of tax benefits, influencing strategic decisions to potentially divest or restructure.
On the other hand, domestic green energy industries might benefit from decreased foreign competition if companies linked to these countries reduce their presence in the U.S. market. This could foster domestic job growth and innovation but at the risk of increased prices for consumers due to reduced competition.
Governments and political leaders from the listed countries could view the legislation as hostile, potentially straining diplomatic relations further. This tension could extend to broader economic repercussions if these countries reciprocate with similar policies, affecting U.S. firms operating abroad.
In summary, while the bill seeks to align tax policy with national interests, its broad implications for international relations, corporate behavior, and consumer economics underscore the need for careful consideration and transparent rationale behind its provisions.
Issues
The term 'countries of concern' in Section 2 and Section 7531 might be perceived as politically motivated or exclusionary, as it includes specific countries without providing context or rationale for their inclusion. This could have diplomatic implications and economic repercussions with the nations listed.
The definition of 'disqualified company' in Section 7531 is complex, which could lead to challenges in determining whether a company falls under this category. This complexity might result in inconsistent application and potential legal disputes.
The use of the term 'control' in Section 7531, defined by referring to another section of law (section 954(d)(3) with considerations from section 958(a)(2)), may create ambiguity due to the indirect reference, potentially leading to misunderstandings about its applicability.
The section references to a 12-month period for evaluating equity interest in Section 7531 without specifying how this period is determined (e.g., calendar year, fiscal year, rolling 12 months), could result in inconsistent assessments and administrative challenges.
The term 'green energy tax benefits' in Section 7531 is not clearly defined within the section, leading to potential ambiguity about which specific benefits are being denied beyond those explicitly listed, affecting both compliance and enforcement.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of this act states its short title, which is "No Official Giveaways Of Taxpayers’ Income to Oppressive Nations Act," also known as the "NO GOTION Act."
2. Denial of green energy tax benefits to companies connected to countries of concern Read Opens in new tab
Summary AI
Congress is proposing a law in the Internal Revenue Code that would prevent companies tied to certain countries, like China, Russia, and Iran, from receiving green energy tax benefits. These companies include those controlled by or affiliated with governments or entities from these countries, and the rule would start applying to tax years after the law is enacted.
7531. Denial of green energy tax benefits to companies connected to countries of concern Read Opens in new tab
Summary AI
In this bill section, companies referred to as "disqualified" will not receive tax benefits for green energy if they are controlled by or connected to certain countries considered concerning, like China, Russia, and Iran. A disqualified company can either be directly associated with these countries or indirectly through ownership or financial arrangements.