diff --git a/devstack/lib/heat b/devstack/lib/heat
index ea6a353c6c..8e953ca261 100644
--- a/devstack/lib/heat
+++ b/devstack/lib/heat
@@ -438,8 +438,12 @@ function configure_tempest_for_heat {
     # Skip CfnInitIntegrationTest as latest fedora images don't have heat-cfntools
     iniset $TEMPEST_CONFIG heat_plugin skip_scenario_test_list 'AutoscalingLoadBalancerTest, AutoscalingLoadBalancerv2Test, \
 	    SoftwareConfigIntegrationTest, AodhAlarmTest, CfnInitIntegrationTest'
-    # Skip LoadBalancerv2Test as deprecated neutron-lbaas service is not enabled
-    iniset $TEMPEST_CONFIG heat_plugin skip_functional_test_list 'LoadBalancerv2Test, NotificationTest'
+    # Skip LoadBalancerv2Test as deprecated neutron-lbaas service is not enabled.
+    # Also Skip a few tests failing because of a known libvirt issue in Jammy
+    # https://bugs.launchpad.net/nova/+bug/1998274
+    iniset $TEMPEST_CONFIG heat_plugin skip_functional_test_list 'LoadBalancerv2Test, NotificationTest, \
+        UpdateStackTest.test_stack_update_with_replacing_userdata, \
+        CancelUpdateTest.test_cancel_update_server_with_port'
 
     openstack flavor show m1.heat_int || openstack flavor create m1.heat_int --ram 512 --disk 10
     openstack flavor show m1.heat_micro || openstack flavor create m1.heat_micro --ram 128 --disk 1
diff --git a/heat_integrationtests/functional/test_cancel_update.py b/heat_integrationtests/functional/test_cancel_update.py
index cb7620c5bb..68ba3f447e 100644
--- a/heat_integrationtests/functional/test_cancel_update.py
+++ b/heat_integrationtests/functional/test_cancel_update.py
@@ -10,8 +10,6 @@
 #    License for the specific language governing permissions and limitations
 #    under the License.
 
-import testtools
-
 from heat_integrationtests.functional import functional_base
 
 
@@ -48,7 +46,6 @@ resources:
         if not self.conf.minimal_instance_type:
             raise self.skipException("No minimal flavor configured to test.")
 
-    @testtools.skip('Bug 1998274')
     def test_cancel_update_server_with_port(self):
         parameters = {'InstanceType': self.conf.minimal_instance_type,
                       'ImageId': self.conf.minimal_image_ref,
diff --git a/tox.ini b/tox.ini
index 662ebcac7f..801e49dd50 100644
--- a/tox.ini
+++ b/tox.ini
@@ -2,7 +2,6 @@
 envlist = py38,py39,pep8
 ignore_basepython_conflict = True
 minversion = 3.18.0
-skipsdist = True
 
 [testenv]
 basepython = python3
@@ -17,7 +16,10 @@ commands =
   stestr run {posargs}
   stestr slowest
 
-passenv = http_proxy HTTP_PROXY https_proxy HTTPS_PROXY no_proxy NO_PROXY
+passenv =
+  http_proxy
+  https_proxy
+  no_proxy
 
 [testenv:pep8]
 commands =