S. 4796: Stock Buyback Accountability Act of 2026 (119th Congress) Bill Summary

This bill would raise the federal excise tax on corporate stock buybacks from 1% to 4%. A stock buyback is when a company uses its money to repurchase its own shares from investors.

What changes

Higher tax on buybacks: Companies would pay a 4% tax on the value of stock they repurchase, instead of the current 1% tax.
Effective date: The higher tax would apply to stock repurchases made after the bill becomes law.
Transition rule for the enactment year: For the year in which the law is enacted, the bill includes a formula to split the tax reduction between buybacks made before and after the enactment date.

Exceptions and adjustments

The bill would also change how the buyback tax is adjusted in certain cases. It adds an exception for stock issued to some high-paid workers and executives, including:

covered employees and specified covered employees under existing tax rules, and
other individuals who receive more than $1 million in compensation in a taxable year for services to the company or certain affiliates.

This adjustment would apply to stock issued or provided in taxable years ending more than 90 days after the bill becomes law.

In plain terms

If enacted, the bill would make it more expensive for large corporations to buy back their own shares. That could affect how some companies choose to use their profits, such as whether to return money to shareholders through buybacks or through other methods.