Treasury unveils new details on plans for stock buyback tax

The Treasury Department on Tuesday released 600 pages of proposed regulations detailing how a stock buyback tax will work.

They detail how to calculate the levy, created by Democrats almost two years ago, as well as how to report and pay the one-percent tax.

The rules explain what counts as a stock repurchase for purposes of the tax along with what other economically similar transactions are also subject to the charge. Among those: buybacks that happen as part of certain corporate mergers.

The administration is also making various exceptions to the tax, including for dividends, situations where stock is contributed to employer-sponsored retirement plans and when companies buy back less than $1 million in stock in a year.

Democrats created the tax to help defray the cost of their 2022 Inflation Reduction Act.

Wall Street has greeted the tax with a shrug, with a long list of companies continuing to buy back their stock despite the tax.

That has helped fuel calls by Democrats to increase the charge and, as part of his latest budget request, President Joe Biden proposed quadrupling it to four percent.

“This proposed rule is a key part of the Biden administration’s efforts to improve tax fairness and reduce the deficit by closing loopholes and ensuring wealthy individuals, large corporations, and complex partnerships pay taxes owed,” Treasury Secretary Janet Yellen said in a statement.