Stock Buyback Accountability Act

Summary#

The bill raises the excise tax on corporate stock repurchases from 1 percent to 4 percent. It also changes the rule that reduces the amount of repurchases subject to the tax when a corporation issues stock. Under the change, that reduction does not apply to the fair market value of stock issued or provided to (1) an employee who is a covered employee or specified covered employee as defined in section 162(m), or (2) a person (other than such an employee) who receives more than $1,000,000 in remuneration in a taxable year of the covered corporation for services performed.

The 4 percent tax rate applies to repurchases after the date the Act is enacted. The exceptions for stock issued to the listed persons apply to stock issued in taxable years ending more than 90 days after enactment. The bill also includes a special prorating rule for taxable years that include the date of enactment.

What it means for you#

  • Companies that buy back their own stock after enactment will be subject to a 4 percent excise tax on those repurchases.
  • Stock that a company gives to certain high-paid employees or to non-employees paid over $1,000,000 in a taxable year will not reduce the amount of repurchases excluded from the tax under the adjusted rule.
  • The new tax rate starts for repurchases after enactment. The change to which stock counts for the reduction applies to stock issued in taxable years ending more than 90 days after enactment.

Expenses#

  • The bill increases the excise tax rate on repurchases from 1 percent to 4 percent.
  • No publicly available information on expected revenue or detailed federal cost estimates is included in the bill text or metadata provided.

Proponents' View#

No publicly available information on proponents' stated arguments is included in the bill text or metadata provided.

Opponents' View#

No publicly available information on opponents' stated arguments is included in the bill text or metadata provided.