Taxing Buybacks from Big Oil Windfalls Act

This bill increases the excise tax on stock buybacks for large oil and gas companies from 1% to 25%. The higher tax applies only during a specific period that ends when the average weekly retail price of regular gasoline falls below $2.937 per gallon for five consecutive weeks.

Sec. 2, Increase in tax on repurchase of corporate stock by large oil and gas companies: The bill amends the Internal Revenue Code to add a new subsection for large oil and gas companies. For a covered corporation that is an "applicable corporation" in a taxable year, the stock repurchase excise tax rate is increased from 1% to 25%. An applicable corporation is one with average annual gross receipts of at least $1 billion over the prior three taxable years and that is primarily engaged in oil or natural gas trades or businesses, including production, refining, processing, transportation, or distribution. The higher tax applies to stock repurchases made after the bill's enactment and before the first month after the gasoline price requirement is met. The gasoline price requirement is met when the weekly retail price of regular gasoline, as determined by the Energy Information Administration, is less than $2.937 per gallon for each week in any five-consecutive-week period ending after enactment. A special rule adjusts the netting of stock repurchases for taxable years that include both periods when the higher tax applies and periods when it does not.