I 
117TH CONGRESS 
2D SESSION 
H. R. 8559 
To amend the Internal Revenue Code of 1986 to provide tax relief for 
certain small business owners, to impose a tax on the repurchase of 
corporate stock, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2022 
Ms. CRAIG introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
tax relief for certain small business owners, to impose 
a tax on the repurchase of corporate stock, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business Owner 
Tax Relief Act of 2022’’. 
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SEC. 2. ENHANCED DEDUCTION FOR CERTAIN SELF-EM-
PLOYED INDIVIDUALS. 
(a) IN GENERAL.—Section 164(f) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(3) ENHANCED
DEDUCTION
FOR
LOWER-IN-
COME INDIVIDUALS.—In the case of an individual 
with a gross income of less than $400,000 for the 
taxable year, paragraph (1) shall be applied by sub-
stituting ‘three quarters of the taxes imposed’ for 
‘one-half of the taxes imposed’.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 3. EXCISE TAX ON REPURCHASE OF CORPORATE 
STOCK. 
(a) IN GENERAL.—Subtitle D is amended by insert-
ing after chapter 36 the following new chapter: 
‘‘CHAPTER 37—REPURCHASE OF 
CORPORATE STOCK 
‘‘Sec. 4501. Repurchase of corporate stock. 
‘‘SEC. 4501. REPURCHASE OF CORPORATE STOCK. 
‘‘(a) GENERAL RULE.—There is hereby imposed on 
each covered corporation a tax equal to 0.8 percent of the 
fair market value of any stock of the corporation which 
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is repurchased by such corporation during the taxable 
year. 
‘‘(b) COVERED CORPORATION.—For purposes of this 
section, the term ‘covered corporation’ means any domes-
tic corporation the stock of which is traded on an estab-
lished securities market (within the meaning of section 
7704(b)(1)). 
‘‘(c) REPURCHASE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘repurchase’ 
means— 
‘‘(A) a redemption within the meaning of 
section 317(b) with regard to the stock of a 
covered corporation, and 
‘‘(B) any transaction determined by the 
Secretary to be economically similar to a trans-
action described in subparagraph (A). 
‘‘(2) TREATMENT OF PURCHASES BY SPECIFIED 
AFFILIATES.— 
‘‘(A) IN
GENERAL.—The acquisition of 
stock of a covered corporation by a specified af-
filiate of such covered corporation, from a per-
son who is not the covered corporation or a 
specified affiliate of such covered corporation, 
shall be treated as a repurchase of the stock of 
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the covered corporation by such covered cor-
poration. 
‘‘(B) SPECIFIED
AFFILIATE.—For pur-
poses of this section, the term ‘specified affil-
iate’ means, with respect to any corporation— 
‘‘(i) any corporation more than 50 
percent of the stock of which is owned (by 
vote or by value), directly or indirectly, by 
such corporation, and 
‘‘(ii) any partnership more than 50 
percent of the capital interests or profits 
interests of which is held, directly or indi-
rectly, by such corporation. 
‘‘(3) ADJUSTMENT.—The amount taken into 
account under subsection (a) with respect to any 
stock repurchased by a covered corporation shall be 
reduced by the fair market value of any stock issued 
by the covered corporation during the taxable year, 
including the fair market value of any stock issued 
to employees of such covered corporation or a speci-
fied affiliate of such covered corporation during the 
taxable year, whether or not such stock is issued in 
response to the exercise of an option to purchase 
such stock. 
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‘‘(d) SPECIAL RULES FOR ACQUISITION OF STOCK OF 
CERTAIN FOREIGN CORPORATIONS.— 
‘‘(1) IN GENERAL.—In the case of an acquisi-
tion of stock of an applicable foreign corporation by 
a specified affiliate of such corporation (other than 
a foreign corporation or a foreign partnership (un-
less such partnership has a domestic entity as a di-
rect or indirect partner)) from a person who is not 
the applicable foreign corporation or a specified affil-
iate of such applicable foreign corporation, for pur-
poses of this section— 
‘‘(A) such specified affiliate shall be treat-
ed as a covered corporation with respect to such 
acquisition, 
‘‘(B) such acquisition shall be treated as a 
repurchase of stock of a covered corporation by 
such covered corporation, and 
‘‘(C) the adjustment under subsection 
(c)(3) shall be determined only with respect to 
stock issued by such specified affiliate to em-
ployees of the specified affiliate. 
‘‘(2) SURROGATE FOREIGN CORPORATIONS.—In 
the case of a repurchase of stock of a covered surro-
gate foreign corporation by such covered surrogate 
foreign corporation, or an acquisition of stock of a 
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corporation 
(as 
determined 
under 
section 
7874(a)(2)(B) by substituting ‘September 20, 
2021’ for ‘March 4, 2003’ each place it ap-
pears) the stock of which is traded on an estab-
lished securities market (within the meaning of 
section 7704(b)(1)), but only with respect to 
taxable years which include any portion of the 
applicable period with respect to such corpora-
tion under section 7874(d)(1). 
‘‘(C) EXPATRIATED
ENTITY.—The term 
‘expatriated entity’ has the meaning given such 
term by section 7874(a)(2)(A). 
‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply— 
‘‘(1) to the extent that the repurchase is part 
of a reorganization (within the meaning of section 
368(a)) and no gain or loss is recognized on such re-
purchase by the shareholder under chapter 1 by rea-
son of such reorganization, 
‘‘(2) in any case in which the stock repurchased 
is, or an amount of stock equal to the value of the 
stock repurchased is, contributed to an employer- 
sponsored retirement plan, employee stock ownership 
plan, or similar plan, 
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‘‘(3) in any case in which the total value of the 
stock repurchased during the taxable year does not 
exceed $1,000,000, 
‘‘(4) under regulations prescribed by the Sec-
retary, in cases in which the repurchase is by a deal-
er in securities in the ordinary course of business, 
‘‘(5) to repurchases by a regulated investment 
company (as defined in section 851) or a real estate 
investment trust, or 
‘‘(6) to the extent that the repurchase is treated 
as a dividend for purposes of this title. 
‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary 
shall prescribe such regulations and other guidance as are 
necessary or appropriate to administer and to prevent the 
avoidance of the purposes of this section, including regula-
tions and other guidance— 
‘‘(1) to prevent the abuse of the exceptions pro-
vided by subsection (e), 
‘‘(2) to address special classes of stock and pre-
ferred stock, and 
‘‘(3) for the application of the rules under sub-
section (d).’’. 
(b) TAX NOT DEDUCTIBLE.—Paragraph (6) of sec-
tion 275(a) is amended by inserting ‘‘37,’’ before ‘‘41’’. 
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(c) CLERICAL AMENDMENT.—The table of chapters 
for subtitle D is amended by inserting after the item relat-
ing to chapter 36 the following new item: 
‘‘CHAPTER 37—REPURCHASE OF CORPORATE STOCK’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to repurchases (within the meaning 
of section 4501(c) of the Internal Revenue Code of 1986, 
as added by this section) of stock after December 31, 
2021. 
Æ 
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