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.
