S. 1416

119 S1416 IS: Reduction of Excess Business Holding Accrual Act
 U.S. Senate
 2025-04-10
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 EN
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 II  119th CONGRESS  1st Session  S. 1416  IN THE SENATE OF THE UNITED STATES   April 10, 2025   Mr. Scott of Florida  introduced the following bill; which was read twice and referred to the  Committee on Finance    A BILL
To amend the Internal Revenue Code of 1986 for purposes of the tax on private foundation excess business holdings to treat as outstanding any employee-owned stock purchased by a business enterprise pursuant to certain employee stock ownership retirement plans.
1.
Short title
This Act may be cited as the   Reduction of Excess Business Holding Accrual Act  .
2.
Certain purchases of employee-owned stock disregarded for purposes of foundation tax on excess business holdings
(a)
In general
 Section 4943(c)(4)(A)  of the Internal Revenue Code of 1986 is amended by adding at the end the following new clauses:
(v)
For purposes of clause (i), subparagraph (D), and paragraph (2), any voting stock which—
(I)
is not readily tradable on an established securities market,
(II)
is purchased by the business enterprise on or after January 1, 2020, from an employee stock ownership plan (as defined in section 4975(e)(7)) in which employees of such business enterprise participate, in connection with a distribution from such plan, and
(III)
is held by the business enterprise as treasury stock, cancelled, or retired,
  shall be treated as outstanding voting stock, but only to the extent so treating such stock would not result in permitted holdings exceeding 49 percent (determined without regard to this clause). The preceding sentence shall not apply with respect to the purchase of stock from a plan during the 10-year period beginning on the date the plan is established.
(vi)
Clause (ii) shall not apply with respect to any decrease in the percentage of holdings in a business enterprise by reason of the application of clause (v).
 .
(b)
Effective date
The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.