Stock Buyback Accountability Act of 2026
- Bill Number
- S. 4796
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-06-16: Read twice and referred to the Committee on Finance. (text: CR S2821)
- Last Updated
- 2026-07-07T16:43:09Z
AI-Generated Summary
Purpose This legislation, titled the Stock Buyback Accountability Act of 2026, amends the Internal Revenue Code of 1986 to raise the excise tax rate on corporate stock repurchases and limit certain tax adjustments related to stock issued to high-compensated individuals.
Key Provisions
- Increases the excise tax on stock repurchases from 1% to 4%.
- Modifies the adjustment rules under Section 4501(c)(3) so that the fair market value reduction for newly issued stock does not apply to stock provided to:
- Covered employees or specified covered employees under Section 162(m).
- Any person receiving more than $1,000,000 in remuneration for services to the corporation or its affiliates in taxable years beginning after December 31, 2025.
- Establishes specific effective dates for the rate increase and the adjustment changes, including proration rules for taxable years that straddle the enactment date.
Significant Changes to Existing Law
- Raises the stock repurchase excise tax rate from 1% to 4%, applying to repurchases after the date of enactment.
- Narrows the scope of allowable reductions for stock issuances by excluding compensation-related grants to executives and high earners, effective for stock issued in taxable years ending more than 90 days after enactment.
Potential Impacts
- Increases federal tax revenue from corporations engaging in stock buybacks.
- May affect corporate financial strategies, including decisions on capital returns versus investments or employee compensation.
- Could influence government agencies such as the IRS through additional enforcement and collection responsibilities.
- Limited direct effects on international relations, though multinational corporations may adjust cross-border practices.
Main Stakeholders Affected
- Publicly traded corporations that repurchase their own stock.
- Executives and highly compensated employees (those covered under Section 162(m) or earning over $1 million).
- Shareholders and investors in affected companies.
- The Internal Revenue Service and Department of the Treasury.
Notable Legal, Constitutional, or Political Implications
- Represents a targeted increase in excise taxation on corporate transactions without altering constitutional tax authority.
- Introduces new limitations on tax adjustments tied to executive compensation rules, potentially affecting corporate governance and compensation structures.
- Applies prospectively with transitional proration, minimizing retroactive application concerns.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Schumer, Charles E. [D-NY]
Cosponsors (6)
Sen. Wyden, Ron [D-OR], Sen. Warren, Elizabeth [D-MA], Sen. Reed, Jack [D-RI], Sen. Van Hollen, Chris [D-MD], Sen. Markey, Edward J. [D-MA], Sen. Whitehouse, Sheldon [D-RI]
Recent Actions
- 2026-06-16: Read twice and referred to the Committee on Finance. (text: CR S2821)
- 2026-06-16: Introduced in Senate
Bill Versions
- Stock Buyback Accountability Act of 2026 — issued 2026-06-16 — PDF (4 pages)