If you are under the BEAT threshold (generally 3 percent), then BEAT is turned off. However, as soon as you are over the threshold (even by a dollar) it is turned on and the BEAT operates as a minimum tax. Staying under the threshold to keep the BEAT switch off is important.
BEAT has an off and on switch. It applies only to “applicable taxpayers,” that is, those that have average annual gross receipts for a three-year period exceeding a certain amount and that also have a base erosion percentage of at least 3 percent for the tax year (2 percent for banks or registered securities dealers). The BEAT switch is turned on, which makes the BEAT rules applicable, if the taxpayer has the tainted base erosion percentage or higher. If the taxpayer can keep its base erosion percentage below that amount, the BEAT rules are turned off.