Taxing Buybacks from Big Oil Windfalls Act

Key Points

• This bill would raise the excise tax on stock buybacks from 1% to 25% for large oil and gas companies with at least $1 billion in average annual gross receipts over the prior three years. Stock buybacks are when a company purchases its own shares, which typically boosts the stock price and benefits shareholders.
• The higher tax applies broadly across the oil and gas industry, covering companies involved in production, refining, processing, transportation, and distribution of oil or natural gas.
• The 25% tax has a built-in off switch: it expires once the national average retail price of regular gasoline stays below $2.937 per gallon for five consecutive weeks. Until that happens, every stock buyback by a qualifying oil company faces the steep tax rate.
• The bill was introduced by Sen. Wyden with 14 Democratic co-sponsors and referred to the Senate Finance Committee. In the current political environment with a Republican-controlled Congress, it faces steep odds of advancing.