The Trump administration plans to expand corporate tax R&D deductions, benefiting Salesforce and Qualcomm

The U.S. Treasury Department is preparing to release a corporate tax "workaround" that will bring significant tax savings to companies like Salesforce and Qualcomm.

According to media reports citing informed sources, this tax guidance, which could be announced as early as next week, will allow companies to fully utilize the generous R&D tax incentives included in President Trump's "One Big Beautiful tax bill."

The Treasury's proposal will address a long-standing headache for large corporations and their Washington lobbyists: the 15% corporate minimum tax introduced during the Biden administration (applicable to companies with annual revenues of at least $1 billion) prevents companies from fully claiming these R&D deductions.

This guidance will respond to concerns from the business community. These R&D tax incentives, along with the revisions planned by the Treasury, are particularly important for R&D-intensive industries such as technology, pharmaceuticals, and manufacturing.

The aforementioned guidance is still in the final review stage, and its release may be delayed.

Trump's tax reform bill allows companies to claim retroactive R&D deductions, with a total value expected to reach $67 billion. However, it is important to note that this extremely generous incentive could also trigger the 15% corporate minimum tax for many companies.

Companies like Airbnb, Broadcom, and Applied Materials have disclosed in regulatory filings that their large deductions could trigger the 15% corporate alternative minimum tax (CAMT) or prevent them from claiming hundreds of millions of dollars in related tax credits (which are associated with past minimum tax payments).

This new tax guidance is another significant boon for large corporations, providing them with additional tax benefits on top of the incentives they have already received through Trump's tax reform bill (which passed Congress in July this year). This legislation restored full, immediate deductions for R&D investments, a provision that expired in 2022.

Additionally, the legislation made permanent the deduction for loan interest, expanded depreciation deductions for equipment purchases, and increased the SALT deduction limit.

The upcoming guidance from the U.S. Treasury will be another in a series of revisions aimed at weakening the 15% corporate minimum tax established by the Biden administration in 2022. The Treasury has already relaxed related regulations this year, providing exemptions for insurance, shipping, and utility companies, and allowing unrealized cryptocurrency gains to be excluded from taxable income.

Tax policy experts indicate that the Treasury is able to make these modifications because Congress granted the Treasury unusually broad implementation discretion when drafting the corporate minimum tax law.

Businesses have also complained about the interaction between the R&D deductions and the international tax rules from Trump's first term, which are designed to prevent companies from shifting profits to low-tax countries. However, it remains unclear whether the forthcoming guidance will address this issue or whether the Treasury has the legal authority to do so.

The Treasury's guidance is expected to provoke swift criticism from progressive Democrats, including Massachusetts Senator Elizabeth Warren, who has publicly opposed any measures that would limit the applicability of the corporate minimum tax