New RESILIENCE Act Offers Tax Break for Utility Repairs Starting After 2024

The RESILIENCE Act of 2025 introduces a specific change to the U.S. tax code affecting public utility companies. Starting for tax years after December 31, 2024, Section 2 of the act amends how these companies calculate their income for the Corporate Alternative Minimum Tax (CAMT). Specifically, it allows them to reduce their 'adjusted financial statement income' by deducting certain costs associated with repairing and maintaining essential public utility property – think power lines, pipelines, or water treatment facilities – as defined under Section 168(i)(10) of the Internal Revenue Code. These deductions, typically claimed under Section 162 for regular business expenses, can now also count towards lowering this specific measure of income, up to the amount deducted for regular tax purposes.

A New Deduction for Utility Upkeep

So, what does this mean practically? Imagine your local electric company spends significantly on fixing power lines after a major storm. Under this act, those repair costs (classified under Section 162) could potentially reduce the income figure used to calculate their CAMT liability. The bill essentially allows utilities to count these repair and maintenance expenses, which they already treat as depreciation on their financial statements, against their adjusted financial statement income for CAMT purposes. This change aligns the tax treatment more closely with how these expenses are reported financially, potentially lowering the utility's overall tax bill.

Potential Ripples: Infrastructure vs. Tax Revenue

The idea seems to be that encouraging deductions for repairs could incentivize utilities to invest more in maintaining the infrastructure we all rely on – potentially leading to more reliable service. However, there's another side to this coin. Reducing the tax burden for utility companies means less tax revenue collected by the government from these entities. This could eventually lead to a shortfall that needs to be made up elsewhere, potentially shifting the tax burden indirectly onto other taxpayers or reducing funds available for public services. The bill also relies on how utilities classify expenses on their financial statements and grants the Treasury Secretary authority to specify further adjustments, adding a layer of administrative detail to watch as this rolls out.