HONOR Act

Key Points

• This bill stops U.S. companies and individuals from claiming tax credits or deductions for any taxes they pay to the Russian government. Normally, the U.S. allows taxpayers to subtract taxes paid to foreign countries from their U.S. tax bill to avoid being taxed twice, but this bill removes that benefit for money paid to Russia.
• The goal of the policy is to make it much more expensive for American businesses to continue operating in Russia. By removing these tax breaks, the U.S. government is attempting to discourage financial support for the Russian government.
• The new rules would take effect 30 days after the bill becomes law for tax credits and 90 days after for tax deductions. These restrictions will remain in place until the U.S. officially decides to restore normal trade relations with Russia.
• This change applies regardless of any existing tax treaties the U.S. has with Russia. It represents a significant use of the tax code to put economic pressure on a foreign nation during a time of international conflict.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.