[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8559 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 8559
To amend the Internal Revenue Code of 1986 to provide tax relief for
certain small business owners, to impose a tax on the repurchase of
corporate stock, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 28, 2022
Ms. Craig introduced the following bill; which was referred to the
Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to provide tax relief for
certain small business owners, to impose a tax on the repurchase of
corporate stock, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Owner Tax Relief Act
of 2022''.
SEC. 2. ENHANCED DEDUCTION FOR CERTAIN SELF-EMPLOYED INDIVIDUALS.
(a) In General.--Section 164(f) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(3) Enhanced deduction for lower-income individuals.--In
the case of an individual with a gross income of less than
$400,000 for the taxable year, paragraph (1) shall be applied
by substituting `three quarters of the taxes imposed' for `one-
half of the taxes imposed'.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2021.
SEC. 3. EXCISE TAX ON REPURCHASE OF CORPORATE STOCK.
(a) In General.--Subtitle D is amended by inserting after chapter
36 the following new chapter:
``CHAPTER 37--REPURCHASE OF CORPORATE STOCK
``Sec. 4501. Repurchase of corporate stock.
``SEC. 4501. REPURCHASE OF CORPORATE STOCK.
``(a) General Rule.--There is hereby imposed on each covered
corporation a tax equal to 0.8 percent of the fair market value of any
stock of the corporation which is repurchased by such corporation
during the taxable year.
``(b) Covered Corporation.--For purposes of this section, the term
`covered corporation' means any domestic corporation the stock of which
is traded on an established securities market (within the meaning of
section 7704(b)(1)).
``(c) Repurchase.--For purposes of this section--
``(1) In general.--The term `repurchase' means--
``(A) a redemption within the meaning of section
317(b) with regard to the stock of a covered
corporation, and
``(B) any transaction determined by the Secretary
to be economically similar to a transaction described
in subparagraph (A).
``(2) Treatment of purchases by specified affiliates.--
``(A) In general.--The acquisition of stock of a
covered corporation by a specified affiliate of such
covered corporation, from a person who is not the
covered corporation or a specified affiliate of such
covered corporation, shall be treated as a repurchase
of the stock of the covered corporation by such covered
corporation.
``(B) Specified affiliate.--For purposes of this
section, the term `specified affiliate' means, with
respect to any corporation--
``(i) any corporation more than 50 percent
of the stock of which is owned (by vote or by
value), directly or indirectly, by such
corporation, and
``(ii) any partnership more than 50 percent
of the capital interests or profits interests
of which is held, directly or indirectly, by
such corporation.
``(3) Adjustment.--The amount taken into account under
subsection (a) with respect to any stock repurchased by a
covered corporation shall be reduced by the fair market value
of any stock issued by the covered corporation during the
taxable year, including the fair market value of any stock
issued to employees of such covered corporation or a specified
affiliate of such covered corporation during the taxable year,
whether or not such stock is issued in response to the exercise
of an option to purchase such stock.
``(d) Special Rules for Acquisition of Stock of Certain Foreign
Corporations.--
``(1) In general.--In the case of an acquisition of stock
of an applicable foreign corporation by a specified affiliate
of such corporation (other than a foreign corporation or a
foreign partnership (unless such partnership has a domestic
entity as a direct or indirect partner)) from a person who is
not the applicable foreign corporation or a specified affiliate
of such applicable foreign corporation, for purposes of this
section--
``(A) such specified affiliate shall be treated as
a covered corporation with respect to such acquisition,
``(B) such acquisition shall be treated as a
repurchase of stock of a covered corporation by such
covered corporation, and
``(C) the adjustment under subsection (c)(3) shall
be determined only with respect to stock issued by such
specified affiliate to employees of the specified
affiliate.
``(2) Surrogate foreign corporations.--In the case of a
repurchase of stock of a covered surrogate foreign corporation
by such covered surrogate foreign corporation, or an
acquisition of stock of a covered surrogate foreign corporation
by a specified affiliate of such corporation, for purposes of
this section--
``(A) the expatriated entity with respect to such
covered surrogate foreign corporation shall be treated
as a covered corporation with respect to such
repurchase or acquisition,
``(B) such repurchase or acquisition shall be
treated as a repurchase of stock of a covered
corporation by such covered corporation, and
``(C) the adjustment under subsection (c)(3) shall
be determined only with respect to stock issued by such
expatriated entity to employees of the expatriated
entity.
``(3) Definitions.--For purposes of this subsection--
``(A) Applicable foreign corporation.--The term
`applicable foreign corporation' means any foreign
corporation the stock of which is traded on an
established securities market (within the meaning of
section 7704(b)(1)).
``(B) Covered surrogate foreign corporation.--The
term `covered surrogate foreign corporation' means any
surrogate foreign corporation (as determined under
section 7874(a)(2)(B) by substituting `September 20,
2021' for `March 4, 2003' each place it appears) the
stock of which is traded on an established securities
market (within the meaning of section 7704(b)(1)), but
only with respect to taxable years which include any
portion of the applicable period with respect to such
corporation under section 7874(d)(1).
``(C) Expatriated entity.--The term `expatriated
entity' has the meaning given such term by section
7874(a)(2)(A).
``(e) Exceptions.--Subsection (a) shall not apply--
``(1) to the extent that the repurchase is part of a
reorganization (within the meaning of section 368(a)) and no
gain or loss is recognized on such repurchase by the
shareholder under chapter 1 by reason of such reorganization,
``(2) in any case in which the stock repurchased is, or an
amount of stock equal to the value of the stock repurchased is,
contributed to an employer-sponsored retirement plan, employee
stock ownership plan, or similar plan,
``(3) in any case in which the total value of the stock
repurchased during the taxable year does not exceed $1,000,000,
``(4) under regulations prescribed by the Secretary, in
cases in which the repurchase is by a dealer in securities in
the ordinary course of business,
``(5) to repurchases by a regulated investment company (as
defined in section 851) or a real estate investment trust, or
``(6) to the extent that the repurchase is treated as a
dividend for purposes of this title.
``(f) Regulations and Guidance.--The Secretary shall prescribe such
regulations and other guidance as are necessary or appropriate to
administer and to prevent the avoidance of the purposes of this
section, including regulations and other guidance--
``(1) to prevent the abuse of the exceptions provided by
subsection (e),
``(2) to address special classes of stock and preferred
stock, and
``(3) for the application of the rules under subsection
(d).''.
(b) Tax Not Deductible.--Paragraph (6) of section 275(a) is amended
by inserting ``37,'' before ``41''.
(c) Clerical Amendment.--The table of chapters for subtitle D is
amended by inserting after the item relating to chapter 36 the
following new item:
``Chapter 37--Repurchase of Corporate Stock''.
(d) Effective Date.--The amendments made by this section shall
apply to repurchases (within the meaning of section 4501(c) of the
Internal Revenue Code of 1986, as added by this section) of stock after
December 31, 2021.
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