Bloomberg Tax
Dec. 27, 2022, 1:54 PMUpdated: Dec. 27, 2022, 2:54 PM

Treasury Issues Guidance on New Stock-Buyback Excise Tax (1)

Michael Rapoport
Michael Rapoport
Senior Reporter, Bloomberg Tax

The Treasury Department issued guidance on how the new stock-buyback tax will be imposed and administered.

The guidance was contained in Notice 2023-2, which was issued Tuesday.

Companies have been waiting for Treasury guidance on the 1% excise tax on corporate stock repurchases, which takes effect Jan. 1.

Among the biggest questions has been the scope of transactions to which the new tax will apply. According to the Inflation Reduction Act, which enacted the tax, it will apply not only to conventional stock buybacks, but also to transactions that are “economically similar.”

Among those transactions that will be considered ...