Treasury issues guidance for comment on stock repurchase excise tax, AMT

The Treasury Department this week issued initial guidance regarding a new annual excise tax that applies to repurchases of a publicly traded corporation’s stock that takes place after Dec. 31, 2022. The tax was included as part of the Inflation Reduction Act, which was passed by Congress in August 2022. Among other things, the guidance addresses the types of transactions subject to the tax, how the tax is calculated, and basic rules to prevent avoidance of the tax. Comments on the guidance will be accepted 60 days after publication in the Federal Register.

The Treasury Department also issued initial guidance on the Inflation Reduction Act’s 15% alternative minimum tax, which applies to large companies earning an average of more than $1 billion annually beginning in 2023. This guidance also has a 60-day comment period.