Insights
Analysis
The 1% Stock Buyback Excise Tax: Questions Public Company Finance Teams Should Ask Before 2023
The new stock buyback excise tax may look modest at first glance, but it creates planning and timing questions for public companies and groups using repurchase activity as part of capital strategy.
Why the issue matters before the effective date
Once a new excise tax is effective, the relevant repurchase and issuance activity is already happening in a changed environment. Finance teams should understand the rule before they cross into the new year.
Review areas
- expected repurchase volume
- interaction with stock issuance activity
- documentation around exceptions and netting concepts
- broader capital allocation timing
Bottom line
Even small-rate taxes can influence timing, modeling, and process when they attach to large transaction volume.
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