A proposed $1.75 trillion social safety net spending and climate change bill known as the Build Back Better Act includes language that would require a 1 percent tax on stock repurchases, a provision that could have a potential impact on defense companies, Defense One reported Friday.
The Build Back Better framework seeks to “stop large, profitable corporations from paying zero in tax and tax corporations that buyback stock rather than invest in the company,” a White House fact sheet reads.
Lockheed Martin (NYSE: LMT), Raytheon Technologies (NYSE: RTX), Northrop Grumman (NYSE: NOC), General Dynamics (NYSE: GD) and L3Harris Technologies (NYSE: LHX) have bought back approximately $11.1 billion of their own shares, according to a regulatory filing seen by Defense One.
The publication noted those share repurchases could result in approximately $111 million in taxes combined.
CNBC reported that the House on Saturday morning approved a procedural vote for the Build Back Better Act. Lawmakers agreed to back the bill once the Congressional Budget Office releases an analysis of the measure, also known as the CBO score.
The procedural vote came after the House passed Friday night a $1 trillion infrastructure package, which is now headed to the White House for President Joe Biden’s signature.