Bill · S. 1416· Senate(119-S-1416)
Reduction of Excess Business Holding Accrual Act
- Introduced
- 4/10/2025
- Last activity
- 4/10/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Rick Scott
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill, known as the "Reduction of Excess Business Holding Accrual Act," aims to amend the Internal Revenue Code of 1986. It specifically targets the tax on private foundation excess business holdings. The legislation proposes to treat certain employee-owned stock as outstanding voting stock. This applies to stock purchased by a business enterprise from an employee stock ownership plan after January 1, 2020. The provisions apply to stock held as treasury stock, cancelled, or retired.
Yes· 3 of 8
Does this make it easier to run a small business?+4
The bill assists businesses in managing stock distributions through employee ownership plans.
Does this cut taxes for small businesses?+3
The bill provides tax relief for businesses engaging in employee stock ownership plan distributions.
Would business owners be better off under this?+3
It eases the tax burden associated with repurchasing or holding employee stock.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
- Treatment of Employee-Owned Stock: The bill changes how certain voting stock is treated for purposes of the tax on excess business holdings (Section 2(a)). This is positive for business enterprises that purchase stock from an employee stock ownership plan in connection with a plan distribution, provided the stock is not readily tradable on an established securities market and is held as treasury stock, cancelled, or retired.
Potential Negative Impacts for People
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Time Limitation on Plan Purchases: The new treatment of stock does not apply to the purchase of stock from a plan during the 10-year period beginning on the date the plan is established (Section 2(a)). This could be a burden for newer employee stock ownership plans seeking the benefits of this amendment.
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Holding Percentage Limit: The special treatment of stock only applies to the extent that it does not result in permitted holdings exceeding 49 percent (Section 2(a)). This creates a cap on how much of this specific stock can be treated this way.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Improves Small Business Support+4Reduces Small Business Taxes+3Improves Economic Growth+1Increases Job Creation+1
- Demographic And Interest Groups
- Good For Business Owners+3Good For Retirees+1Good For Seniors+1
- Social Issues And Justice
- Improves Poverty Reduction+1
- 4/10/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.