Asset Acquisition Trends After the Repeal of the Corporate Alternative Minimum Tax

B. Anthony Billings, Buagu N. Musazi and Thomas G. Calderon

Public Finance Review, 2025, vol. 53, issue 4, 440-467

Abstract: Understanding tax policy changes is vital for policymakers to assess reform effectiveness and guide future adjustments. This paper examines whether the repeal of the corporate alternative minimum tax (CAMT) under the Tax Cuts and Jobs Act (TCJA) of 2017 impacted firms’ business asset acquisition strategies. Analyzing 11,919 firm-years from 2013 to 2022, the study finds that, on average, firms acquired a lower amount of depreciable assets through operating leases and more through purchases and capital leases after the CAMT repeal. These findings provide insight into how tax changes influence firms’ decisions regarding depreciable business assets, with significant implications for the replacement cycle for business equipment and the adoption and diffusion of technological innovations.

Keywords: corporate alternative minimum tax; Tax Cuts and Jobs Act; cost of capital; leases of depreciable business assets; and purchases of depreciable assets; and the Tax Reform Act of 1986 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:53:y:2025:i:4:p:440-467

DOI: 10.1177/10911421251319407

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