Bill > S3847

This bill, titled the "Stop Corporate Inversions Act of 2026," aims to modify the rules surrounding "inverted corporations," which are companies that reincorporate in a foreign country to avoid U.S. taxes while maintaining significant operations and management in the United States. The key provision expands the definition of an inverted corporation by lowering the threshold for when a foreign company will be treated as a domestic corporation for tax purposes. Specifically, it introduces the concept of an "inverted domestic corporation," which is a foreign company that acquires substantially all the properties or assets of a U.S. company or partnership after May 8, 2014, and subsequently has either more than 50 percent of its stock held by former U.S. shareholders or partners, or its management and control, along with significant domestic business activities, primarily occur within the United States. The bill also includes an exception for foreign corporations that have substantial business activities in their country of organization compared to their overall business activities, and it clarifies that "significant domestic business activities" means at least 25 percent of employees, employee compensation, assets, or income are U.S.-based. These changes are intended to prevent U.S. companies from artificially shifting their tax residency overseas to reduce their tax burden.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/3847/all-info