ARTICLE
30 August 2022

Evaluating The New Stock Buyback Tax

W
WilmerHale

Contributor

WilmerHale provides legal representation across a comprehensive range of practice areas critical to the success of its clients. With a staunch commitment to public service, the firm is a leader in pro bono representation. WilmerHale is 1,000 lawyers strong with 12 offices in the United States, Europe and Asia.
In the Inflation Reduction Act of 2022, Public Law 117-169, one of the headline tax changes is a 1% excise tax on stock repurchases by public companies.
United States Tax

In the Inflation Reduction Act of 2022, Public Law 117-169, one of the headline tax changes is a 1% excise tax on stock repurchases by public companies. The tax takes effect on January 1, 2023 and public issuers should be aware that the new tax extends broadly to situations beyond run-of-the-mill share repurchases. The provision for netting new issuances against repurchases can operate in unexpected ways and companies should analyze the potential application of this tax to any transaction involving the purchase, exchange or transfer of their stock.

In this WilmerHale client alert titled "Surprises and Questions Around the New Stock Buyback Tax," our tax specialists share key highlights from the new excise tax, such as what companies are subject to the tax, what exceptions there are from the tax and what transactions other than buy-backs may be subject to the tax.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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