Sponsor
David Kustoff
Representative · R-TN
Representative · R-TN
The bill removes the 1% stock buyback excise tax, simplifying compliance and lowering corporate tax costs while increasing the risk that companies favor buybacks over investment or pay and that federal revenue (and thus government funding) is reduced.
Corporations and their shareholders will pay less in aggregate corporate tax costs because the 1% excise tax on stock repurchases is eliminated starting in 2025, which can increase after-tax corporate cash available to investors.
Removing the repurchase excise tax simplifies corporate tax compliance and reduces the IRS administrative burden for enforcing that specific tax provision.
Workers, small businesses, and taxpayers may see fewer resources for higher wages, capital investment, or debt reduction because eliminating the tax may encourage more corporate share repurchases that divert cash away from those uses.
Federal taxpayers could face higher budget deficits or reduced funding for government programs if lost revenue from the excise tax is not offset elsewhere in the budget.
Based on analysis of 2 sections of legislative text.
Repeals the federal excise tax on corporate stock repurchases by eliminating Chapter 37 of the Internal Revenue Code, effective for tax years after 2024.
Official title: To amend the Internal Revenue Code of 1986 to repeal the excise tax on repurchase of corporate stock.
Introduced January 23, 2025 by David Kustoff · Last progress January 23, 2025
Repeals the federal excise tax on corporate stock repurchases by eliminating Chapter 37 of the Internal Revenue Code and removing its table entry. The repeal applies to taxable years beginning after December 31, 2024, effectively ending the excise tax on share buybacks for tax years 2025 and later.