Tsy Dept: Corporate Alternative Minimum Tax; Stock Buybacks Tax

The US Tsy Dept just issued initial guidance on two key tax provisions of the Inflation Reduction Act, the Corporate Alternative Minimum Tax and the excise tax on stock buybacks.

• The Inflation Reduction Act created a 15% alternative minimum tax on large companies earning an average of more than $1 billion annually beginning in 2023. The initial high-level guidance issued by Treasury today clarifies which companies the tax applies to and how the alternative minimum tax is calculated.
• The Inflation Reduction Act also created a new annual excise tax that applies to repurchases of a publicly traded corporation’s stock that take place after December 31, 2022. The initial guidance issued by Treasury today addresses the types of transactions subject to the tax, how the tax is calculated, and basic rules to prevent the avoidance of the tax.