Bipartisan Senate duo wants to tax more companies out of Russia

Caitlin Reilly, CQ-Roll Call on Jan 30, 2025

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WASHINGTON — Senate Finance Committee members Catherine Cortez Masto and John Cornyn will introduce legislation Thursday to stop companies from deducting or claiming credits on their U.S. tax bills for taxes paid to Russia.

In response to Russia’s invasion of Ukraine, the draft bill would apply the same treatment to taxes paid to Russia as those paid to Iran and North Korea. It would go a step further than the Treasury Department did last year when it suspended the U.S. tax treaty with Russia at the urging of Cortez Masto, D-Nev., and Cornyn, R-Texas.

“We should not be giving tax breaks to businesses that are funding the Putin regime. It’s that simple,” Cortez Masto said in a statement.

More than 100 U.S. companies are still operating in Russia, according to research by the Yale School of Management. Treasury suspended parts of its tax treaty with Russia last year, after Russia did the same in 2023. But companies can still claim a foreign tax credit or itemized deduction against taxes paid to Russia. The bill, obtained by CQ Roll Call, would stop that practice.

“Businesses that continue to engage with Russia are enriching Putin’s oppressive regime,” Cornyn said in a statement. “This commonsense bill would force these businesses to give up their foreign tax credits and deductions for taxes paid to Russia, which subsidize the Russian war apparatus.”

Some U.S. companies still doing business in Russia, according to the Yale School of Management, include Align Technology Inc., maker of orthodontic medical devices including Invisalign; fast-food restaurant chain Carl’s Jr.; clothing designer GUESS; video game developer Riot Games Inc.; Tupperware Brands Corp. and several others.

It’s not clear how much revenue the legislation would generate, but Republicans will be on the hunt this year for provisions that can offset their plans for trillions of dollars in new and expiring tax cuts as part of their budget reconciliation plans.

The legislation arrives at an uncertain time for U.S. policy toward Russia and Ukraine. President Donald Trump has been critical of aid the U.S. has provided to Ukraine.

But newly confirmed Treasury Secretary Scott Bessent has struck a more sympathetic tone toward the invaded country, saying at his confirmation hearing this month that the Biden administration should have imposed tougher sanctions on Russia. Bessent said he would, with Trump’s blessing, support more aggressive sanctions on the country.