More global tax tensions, you say?

HEY, ANOTHER STRESS POINT: Much of the chatter about the global tax deal in the U.S. has focused, understandably, on the 15 percent minimum tax.

But there’s a whole other pillar to the agreement negotiated through the Organization for Economic Cooperation and Development, and now there are new signs of intercontinental tension over that proposal.

Bruno Le Maire, the French finance minister, said Monday that the EU should look to press ahead with a digital services tax because of the implementation challenges facing Pillar One — in the U.S. and elsewhere, like India and Saudi Arabia.

“We will plead for an unblocking of the situation on Pillar One of digital taxation. The chances of success are slim,” Le Maire said, via our Giorgio Leali.

Keep in mind: A major point of Pillar One was to head off a slew of unilateral digital taxes, which France and other countries in both Europe and other parts of the globe had been eyeing — because they thought they weren’t allowed to collect enough in taxes from the largely American tech titans.

The Pillar One agreement would affect big multinational corporations from a broader array of industries, and essentially seeks to better align where a company pays taxes with where its customers and business are located.

MORE ON THAT IN A BIT. But first, thanks for reading this holiday week version of Weekly Tax. We’re just going to say it: Quite the look for Hoover here.

Driving circles around people: Today marks an even three-quarters of a century since the founding of NASCAR, or the National Association for Stock Car Auto Racing. (As for there always being a tax angle: The incentive for motorsports entertainment complexes expires at the end of 2025, along with lots of other tax policies.)

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BACK TO PILLAR ONE: The OECD has already pushed back the implementation timeline for Pillar One until 2024, but even that might seem ambitious, given that negotiators are still working on technical details.

And then there’s the U.S., where Democrats and Republicans are deeply divided over the minimum tax — and it’s hard to find many people at all that foresee Pillar One gaining traction anytime soon.

(Part of the issue there: Implementing Pillar One likely requires changing tax treaties, which requires a two-thirds supermajority in the Senate — and, well, good luck there.)

So now what? It’s not clear if Le Maire’s remarks on the U.S. blocking Pillar One stem solely from its current status in Congress, or if he’s gathered further reasons for pessimism.

Also not clear: When or even if other governments might actually start moving toward DST’s, even if keen international tax observers in D.C. were far from surprised by Le Maire’s comments.

But it’s interesting to think about how Democrats might respond to just that sort of situation, especially if it should happen during the Biden administration — given the leading role that Treasury Secretary Janet Yellen and her deputies had in crafting the OECD agreement.

In years past, Democrats and Republicans alike called out foreign governments that considered digital services taxes.

But if nothing else, it’s a more complicated calculus for Democrats should another showdown over DST’s occur, considering that it would be occurring because of the gridlock over the global tax deal.

And let’s just put it this way: There was no consensus among the experts that Weekly Tax spoke to over whether Democrats would get on board with retaliatory tariffs — a response not uncommon from the U.S. in recent years, to a variety of policies abroad — should other governments start enacting DST’s.

As an aside: House Ways and Means Chair Jason Smith (R-Mo.) talked up the possibility of trade retaliation to the global minimum tax in a recent letter to OECD brass. But that would require some help from Democrats in Congress and/or the administration, so don’t expect that any time soon, either.

MORE OF A SUGGESTION, REALLY: It has now been six months and four days since Yellen gave the IRS half a year to craft a battle plan for implementing the $80 billion in new funding that Democrats gave the agency in last summer’s Inflation Reduction Act.

But as Law360’s David van den Berg reported late last week, the IRS blew right by that deadline for getting the plan to Yellen, and will only say that it will send it over to Treasury in the “coming weeks.”

Treasury officials had already been saying that it would be a while before the implementation plan might be publicly released, in part because Yellen and the department would need to review it.

And that was before the IRS said it wouldn’t meet the deadline, so it’s anyone’s guess now when that document might see the light of day.

Something else to keep in mind: Sen. Mike Crapo of Idaho, the top Republican on the Finance Committee, expressed some doubt last week that the IRS implementation plan would ever be released publicly.

Crapo said that at the confirmation hearing for Danny Werfel, Biden’s pick to be IRS commissioner. Werfel vowed to be transparent with how the IRS implemented the $80 billion, but didn’t exactly say the plan would be released.

LIFE FOR LIFO? Sens. Sherrod Brown (D-Ohio) and Tim Scott (R-S.C.) rolled out legislation last week to offer tax relief to auto dealers that faced inventory issues because of global supply chain problems.

In all, half of the Senate is sponsoring the bill, which gives some help to businesses that use LIFO, or the last in, first out accounting method.

Companies that use LIFO can face tax penalties if they don’t meet certain inventory thresholds, a problem that cropped up for lots of car dealers in recent years. The Brown and Scott bill — and its companion bill in the House — would give dealers as many as three years to restock their inventory for 2020 or 2021 before having to pay tax penalties.

The Senate actually passed a version of the bill in the dying days of the last Congress, but the measure didn’t clear the House.

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Around the World

Advocates believe that Senate action can act as a springboard to getting the bill signed into law this year — and also note that the proposal wouldn’t actually change the tax code, so it wouldn’t need to be attached to a tax vehicle to pass.

Bloomberg: “Sunak’s Margin for UK Tax Cuts Set to Narrow With Deficit Jump.”

Reuters: “Without naming BBC, India cites evidence of media firm’s unpaid tax.”

Business Insider Africa: “A broken tax system may be affecting trade in East Africa.”

Around the Nation

Topeka Capital-Journal: “Undeterred by $1.5 billion cost, Kansas presses forward on flat income tax plan.”

Associated Press: “GOP plan would speed up Indiana tax cuts, boost vouchers.”

Also AP: “Democratic governor signs GOP-backed tax cut in Kentucky.”

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Did you know?

The Martinsville Speedway is the shortest track in the NASCAR circuit, at a length of .526 miles.