Excise Taxes on Stock Buybacks and Other Repurchases

Summary

This practice note provides a general overview of the 1% stock buyback tax under I.R.C. § 4501, enacted pursuant to the Inflation Reduction Act of 2022 (117 Pub. L. No. 169), the companies and repurchases to which the tax applies and their associated reporting obligations, how the tax is calculated, and exceptions to the tax. This practice note is limited to U.S. federal income tax considerations and does not address any U.S. state, local, foreign, or other tax considerations.