Notice 2023-2 Provides Helpful Guidance Regarding the Stock Repurchase Excise Tax

On December 27, 2022, Treasury issued interim guidance regarding the new excise on stock “repurchases” after December 31, 2022 in the form of Notice 2023-2, which taxpayers can rely on until Treasury publishes additional guidance. As mentioned in prior coverage, the Inflation Reduction Act of 2022 added this tax to the Internal Revenue Code, requiring publicly traded corporations to pay a non-deductible 1% tax on the fair market value of stock repurchases, which includes stock redemptions and certain economically similar transactions as determined by Treasury.
Source: Notice 2023-2 Provides Helpful Guidance Regarding the Stock Repurchase Excise Tax