Read twice and referred to the Committee on Finance.
The bill amends Internal Revenue Code section 4943 to change how certain employee-owned stock purchases affect private foundations' excess business holdings calculations. If a business buys nonpublic stock from an employee stock ownership plan (ESOP) in connection with a distribution and holds it as treasury stock, cancelled, or retired, that stock will be treated as outstanding voting stock for purposes of excess holdings, subject to a cap so permitted holdings do not exceed 49 percent.
Liberals worry about tax loopholes and retroactive revenue loss
Relative to its intended legislative type, this bill is a narrowly tailored substantive amendment to the Internal Revenue Code that specifies conditions under which certain repurchases of employee-owned stock are treated as outstanding for private foundation excess business holdings rules.
The bill amends Internal Revenue Code section 4943 to change how certain employee-owned stock purchases affect private foundations' excess business holdings calculations.
If a business buys nonpublic stock from an employee stock ownership plan (ESOP) in connection with a distribution and holds it as treasury stock, cancelled, or retired, that stock will be treated as outstanding voting stock for purposes of excess holdings, subject to a cap so permitted holdings do not exceed 49 percent.
The rule excludes purchases made during the first 10 years after the ESOP is established and applies to taxable years ending after enactment, with purchases treated as occurring on or after January 1, 2020.
Technically narrow and administrable, but likely requires inclusion in a larger tax package or bipartisan committee backing; small fiscal effect limits urgency.
Relative to its intended legislative type, this bill is a narrowly tailored substantive amendment to the Internal Revenue Code that specifies conditions under which certain repurchases of employee-owned stock are treated as outstanding for private foundation excess business holdings rules. The text identifies precise statutory insertions, effective date, and several limiting rules.
Liberals worry about tax loopholes and retroactive revenue loss
These are examples from the analysis, not a ranked list of the most-affected groups.
Liberals worry about tax loopholes and retroactive revenue loss
Likely sees this as a technical change that could help ESOP liquidity, but worries it weakens limits on foundation control and reduces tax enforcement.
May be skeptical about retroactive application to 2020 and potential revenue loss.
Would favor stronger anti‑abuse safeguards and transparency if supporting at all.
Views the bill primarily as a narrow, technical fix addressing an unintended tax outcome when businesses repurchase ESOP shares.
Appreciates the 49 percent cap and 10-year exclusion, but wants clarity on fiscal impact and anti‑abuse protections.
Support is conditional on limited scope and safeguards.
Likely to support the bill as a pro-business, pro-ESOP clarification that reduces punitive tax outcomes for repurchases and protects employee ownership.
Views the cap and 10-year rule as reasonable safeguards.
Prefers minimal additional regulation.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Technically narrow and administrable, but likely requires inclusion in a larger tax package or bipartisan committee backing; small fiscal effect limits urgency.
The bill has not accumulated any surfaced votes yet.
Liberals worry about tax loopholes and retroactive revenue loss
Technically narrow and administrable, but likely requires inclusion in a larger tax package or bipartisan committee backing; small fiscal e…
Relative to its intended legislative type, this bill is a narrowly tailored substantive amendment to the Internal Revenue Code that specifies conditions under which certain repurchases of employee-owned stock are treate…
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