Taxing Buybacks from Big Oil Windfalls Act
- Bill Number
- S. 4588
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-20: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-23T16:21:02Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code of 1986 to raise the excise tax rate on corporate stock repurchases specifically for large oil and gas companies. The short title is the "Taxing Buybacks from Big Oil Windfalls Act."
Key Provisions
- The bill increases the existing 1 percent excise tax on stock repurchases to 25 percent for qualifying large oil and gas corporations.
- An "applicable corporation" is defined as one with average annual gross receipts of $1 billion or more over the prior three taxable years and that is primarily engaged in oil or natural gas activities.
- Oil or natural gas activities include production, refining, processing, transportation, or distribution.
- The higher tax rate applies to repurchases made after the bill's enactment date but ends on the first day of the first month after the national average retail price of regular gasoline falls below $2.937 per gallon for five consecutive weeks, as measured by the Department of Energy.
- Special allocation rules apply for tax years that straddle the period when the higher rate is in effect.
Significant Changes to Existing Law The measure modifies Section 4501 of the Internal Revenue Code by adding a new subsection that temporarily substitutes a 25 percent rate for the standard 1 percent rate on stock buybacks. It introduces a new definition of "applicable corporation" limited to large oil and gas firms and creates a price-based sunset trigger not present in current law.
Potential Impacts
- Large oil and gas companies would face substantially higher tax costs on stock repurchases during the applicable period.
- The federal government could collect additional revenue from these transactions until gasoline prices meet the specified threshold.
- No direct effects on international relations or foreign entities are described in the bill.
Main Stakeholders Affected
- Large corporations engaged in oil and natural gas production, refining, or related activities with gross receipts meeting the $1 billion threshold.
- Shareholders of those corporations who may see changes in buyback activity.
- The Internal Revenue Service and Department of the Treasury, which would administer and collect the tax.
- U.S. consumers, through the gasoline price trigger that determines the duration of the higher tax rate.
Notable Legal, Constitutional, or Political Implications The bill creates a temporary, conditional tax increase tied to a specific commodity price index, which is a novel mechanism within the existing stock repurchase excise tax framework. It applies only to a defined subset of corporations and includes explicit rules for partial-year application, raising no apparent constitutional issues within the text itself.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (16)
Sen. Schumer, Charles E. [D-NY], Sen. Bennet, Michael F. [D-CO], Sen. Whitehouse, Sheldon [D-RI], Sen. Welch, Peter [D-VT], Sen. Kim, Andy [D-NJ], Sen. Blumenthal, Richard [D-CT], Sen. Van Hollen, Chris [D-MD], Sen. Reed, Jack [D-RI], Sen. Booker, Cory A. [D-NJ], Sen. Hirono, Mazie K. [D-HI], Sen. Markey, Edward J. [D-MA], Sen. Merkley, Jeff [D-OR], Sen. Schatz, Brian [D-HI], Sen. Smith, Tina [D-MN], Sen. Klobuchar, Amy [D-MN], Sen. Blunt Rochester, Lisa [D-DE]
Recent Actions
- 2026-05-20: Read twice and referred to the Committee on Finance.
- 2026-05-20: Introduced in Senate
Bill Versions
- Taxing Buybacks from Big Oil Windfalls Act — issued 2026-05-20 — PDF (5 pages)