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136 STAT. 1829 PUBLIC LAW 117–169—AUG. 16, 2022 ‘‘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 1 percent of the fair market value of any stock of the corporation which is repurchased by such cor- poration 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 corpora- tion, 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 cov- ered corporation shall be reduced by the fair market value of any stock issued by the covered corporation during the tax- able year, including the fair market value of any stock issued or provided to employees of such covered corporation or employees of a specified affiliate of such covered corporation during the taxable year, whether or not such stock is issued or provided 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 sec- tion— Determinations. Determination. Definitions. Definition. 26 USC 4501. 26 USC 4501 prec. VerDate Sep 11 2014 13:57 Oct 25, 2022 Jkt 029139 PO 00169 Frm 00013 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL169.117 PUBL169 jmbennett on LAP3P8D0R2PROD with Publaw