S 1416 · Reduction of Excess Business Holding Accrual Act
Read twice and referred to the Committee on Finance.
- Introduced
- Apr 10, 2025
- Latest action
- Apr 10, 2025
- Sponsor
- Sen. Rick Scott [R-FL]
- Policy area
- Taxation
- Cosponsors
- 0
Summary
Reduction of Excess Business Holding Accrual Act This bill treats certain stock repurchased by a corporation from an employee stock ownership plan (ESOP) as outstanding voting stock for purposes of the federal excise tax imposed on a private foundation’s excess business holdings. Thus, a private foundation may exclude such stock in calculating present holdings in a corporation and liability for the excise tax. (Exceptions apply.) As background, a federal excise tax is imposed on a private foundation that owns more than 20% of the voting stock in a corporation, reduced by the percentage of voting stock held by all disqualified persons (excess business holdings). However, a private foundation with excess business holdings on May 26, 1969 (grandfathered private foundation) may own a greater percentage of voting stock in certain circumstances. Under the bill, stock is treated as outstanding voting stock if such stock is not readily tradable on an established securities market; repurchased from an ESOP on or after January 1, 2020; and held by the corporation as treasury stock, cancelled, or retired. However, such stock is not treated as outstanding voting stock if it is repurchased within the first 10 years of establishing the ESOP or, as a result of the repurchase, the permitted holdings of the private foundation would exceed 49% of the voting stock in the corporation. Finally, under the bill, such stock does not reduce the percentage of voting stock a grandfathered private foundation may own.
Recent actions
- Apr 10, 2025 Read twice and referred to the Committee on Finance.
- Apr 10, 2025 Introduced in Senate
Votes
No recorded votes are available for this bill.