Excise Tax on Repurchase of Corporate Stock

Key Points

• 1A new excise tax applies when corporations repurchase their own stock, making this financial strategy more expensive for large companies
• 2The tax targets major corporations with significant stock buyback programs, not small businesses or individual investors
• 3The goal is to encourage companies to reinvest profits into their workforce, facilities, and innovation rather than enriching shareholders through buybacks
• 4This is part of a broader effort to increase tax revenue from large corporations and reduce income inequality
• 5The rule takes effect in 2025 and applies to stock repurchases completed after the effective date

Key Dates