II 

117TH CONGRESS 

1ST SESSION S. 2758 

To amend the Internal Revenue Code of 1986 to impose an excise tax 

on stock buybacks of publicly traded corporations. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 20, 2021 

Mr. BROWN (for himself and Mr. WYDEN) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to impose 

an excise tax on stock buybacks of publicly traded corporations. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stock Buyback Ac5 countability Act of 2021’’. 

6 SEC. 2. EXCISE TAX ON REPURCHASE OF CORPORATE 

7 STOCK. 

8 (a) IN GENERAL.—Subtitle D of the Internal Rev9 enue Code of 1986 is amended by inserting after chapter 

10 36 the following new chapter: 


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1 ‘‘CHAPTER 37—REPURCHASE OF 

2 CORPORATE STOCK 

‘‘Sec. 4501. Repurchase of corporate stock. 

3 ‘‘SEC. 4501. REPURCHASE OF CORPORATE STOCK. 

4 ‘‘(a) GENERAL RULE.—There is hereby imposed on 

5 each covered corporation a tax equal to 2 percent of the 

6 value of any stock of the corporation repurchased by such 

7 corporation during the taxable year. 

8 ‘‘(b) COVERED CORPORATION.—For purposes of this 

9 section, the term ‘covered corporation’ means— 

10 ‘‘(1) any domestic corporation the stock of 

11 which is traded on an established securities market 

12 (within the meaning of section 7704(b)(1)), and 

13 ‘‘(2) any surrogate foreign corporation (as de14 termined under section 7874(a)(2)(B)) the stock of 

15 which is traded on an established securities market 

16 (within the meaning of section 7704(b)(1)). 

17 ‘‘(c) REPURCHASE.—For purposes of this section— 

18 ‘‘(1) IN GENERAL.— 

19 ‘‘(A) IN GENERAL.—The term ‘repurchase’ 

20 means a redemption within the meaning of sec21 tion 317(b) (applied as provided in subpara22 graph (B)) or any similar transaction (as deter23 mined by the Secretary) with regard to the 

24 stock of a covered corporation. 


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1 ‘‘(B) APPLICATION TO ECONOMICALLY

2 EQUIVALENT TRANSACTIONS.—For purposes of 

3 applying section 317(b) to this section— 

4 ‘‘(i) the acquisition by a corporation 

5 of the right to acquire its stock, and 

6 ‘‘(ii) to the extent provided by the 

7 Secretary, any transaction economically 

8 similar to the acquisition by a corporation 

9 of its stock, 

10 shall be treated in the same manner as the ac11 quisition by a corporation of its stock under 

12 such section 317(b). 

13 ‘‘(2) TREATMENT OF PURCHASES BY SPECIFIED

14 AFFILIATES.— 

15 ‘‘(A) IN GENERAL.—The acquisition of 

16 stock of a covered corporation by a specified af17 filiate of such covered corporation from a per18 son who is not the covered corporation or a 

19 specified affiliate of such covered corporation 

20 shall be treated as a repurchase of the stock of 

21 the covered corporation by such covered cor22 poration. 

23 ‘‘(B) SPECIAL RULES FOR FOREIGN-PAR24 ENTED DOMESTIC CORPORATIONS.— 


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1 ‘‘(i) IN GENERAL.—In the case of an 

2 acquisition of stock of an applicable foreign 

3 corporation by a specified affiliate of such 

4 corporation from a person who is not the 

5 applicable foreign corporation or a speci6 fied affiliate of such applicable foreign cor7 poration, for purposes of this section— 

8 ‘‘(I) such specified affiliate shall 

9 be treated in the same manner as a 

10 covered corporation with respect to 

11 such acquisition, and 

12 ‘‘(II) such acquisition shall be 

13 treated as a repurchase of the stock of 

14 such specified affiliate by such speci15 fied affiliate. 

16 ‘‘(ii) APPLICABLE FOREIGN CORPORA17 TION.—For purposes of this subparagraph, 

18 the term ‘applicable foreign corporation’ 

19 means any foreign corporation which would 

20 be treated as a covered corporation under 

21 this section if it were a domestic corpora22 tion. 

23 ‘‘(C) SPECIFIED AFFILIATE.—For pur24 poses of this section, the term ‘specified affil25 iate’ means, with respect to any corporation— 


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1 ‘‘(i) any domestic corporation more 

2 than 50 percent of the stock of which is 

3 owned (by vote or by value), directly or in4 directly, by such corporation, and 

5 ‘‘(ii) any domestic partnership more 

6 than 50 percent of the capital interests or 

7 profits interests of which is held, directly 

8 or indirectly, by such corporation. 

9 ‘‘(3) ADJUSTMENT.—The amount of any stock 

10 repurchased by a covered corporation taken into ac11 count under subsection (a) shall be reduced by— 

12 ‘‘(A) the value of any stock newly issued 

13 by the covered corporation during the taxable 

14 year, and 

15 ‘‘(B) the value of any stock issued to em16 ployees of such covered corporation during the 

17 taxable year, including in response to the exer18 cise of an option to purchase stock of the cov19 ered corporation. 

20 ‘‘(d) EXCEPTIONS.—Subsection (a) shall not apply— 

21 ‘‘(1) to the extent that the repurchase is part 

22 of a reorganization (within the meaning of section 

23 368(a)) and no gain or loss is recognized under 

24 chapter 1 on such repurchase by reason of such re25 organization, 


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1 ‘‘(2) in any case in which the stock repurchased 

2 is, or an amount of stock equal to the value of the 

3 stock repurchased is, contributed to an employer4 sponsored retirement plan, employee stock ownership 

5 plan, or similar plan, 

6 ‘‘(3) in any case in which the total value of the 

7 stock repurchased during the calendar year does not 

8 exceed $1,000,000, 

9 ‘‘(4) under regulations prescribed by the Sec10 retary, in cases in which the repurchase is by a deal11 er in securities in the ordinary course of business, or 

12 ‘‘(5) to the extent that the repurchase is treated 

13 as a dividend for purposes of this title. 

14 ‘‘(e) DENIAL OF DEDUCTION.—No deduction shall be 

15 allowed under any provision of this title with regard to 

16 the tax imposed by this section. 

17 ‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary 

18 shall prescribe such regulations and other guidance as are 

19 necessary or appropriate to administer and to prevent the 

20 avoidance of the purposes of this section, including regula21 tions and other guidance— 

22 ‘‘(1) to prevent the abuse of the exceptions pro23 vided by subsection (d), 

24 ‘‘(2) with respect to the identification of trans25 actions to which subsection (c)(1)(B)(ii) applies, 


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1 ‘‘(3) to address special classes of stock and pre2 ferred stock, and 

3 ‘‘(4) for the application of the rules under sub4 section (c)(2).’’. 

5 (b) CLERICAL AMENDMENT.—The table of chapters 

6 for subtitle D of the Internal Revenue Code of 1986 is 

7 amended by inserting after the item relating to chapter 

8 36 the following new item: 

‘‘CHAPTER 37—REPURCHASE OF CORPORATE STOCK’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to repurchases (within the meaning 

11 of section 4501(c) of the Internal Revenue Code of 1986, 

12 as added by this section) of stock after December 31, 

13 2021. 

Æ 


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