Amazon Stock Buyback: SEC Rules, Excise Tax, and Shareholder Impact

Amazon’s stock buyback program is a $10 billion repurchase authorization the board approved on March 9, 2022, of which the company has used $6 billion and none since. That leaves roughly $4 billion in remaining capacity, and the authorization has no expiration date.¹²

Where the Program Stands

The 2022 authorization replaced a smaller $5 billion program from 2016, under which Amazon had repurchased only about $2.12 billion in shares.¹ Amazon moved quickly on the new capacity, spending $6 billion on buybacks during 2022. Then it stopped. The 2024 annual report shows no repurchase activity in either 2023 or 2024.²

Because the authorization carries no expiration, management can restart purchases at any time through open market transactions, privately negotiated deals, or arrangements structured through investment banks.¹ The pause since 2022 is consistent with Amazon’s long-running preference for reinvesting cash into fulfillment capacity and Amazon Web Services rather than returning it to shareholders. Many large technology peers run continuous buyback programs; Amazon does not.

Why the $6 Billion Barely Moved the Share Count

A buyback shrinks the share count and lifts each remaining shareholder’s ownership percentage. For Amazon, though, the more important job of a repurchase is offsetting dilution from stock-based compensation. Amazon granted roughly $19.5 billion in stock-based compensation during 2025, which steadily adds shares as employee equity vests. As of late 2025, the company had approximately 10.8 billion shares outstanding.

The $6 billion Amazon spent in 2022 didn’t come close to neutralizing that dilution. When stock-based compensation runs at roughly three times the buyback spending, the net effect on share count is modest. A repurchase headline sounds impressive on its own; the useful question is whether the company is issuing new stock to employees faster than it’s retiring old stock through buybacks. For Amazon, the answer has been yes.

What Amazon’s Buyback Means If You Own the Stock

You don’t need to do anything when Amazon repurchases shares. The company buys on the open market from willing sellers, and your holdings stay where they are unless you decide to sell. Your ownership percentage rises slightly because the denominator shrinks.

If you do sell shares during a repurchase period, you’re taxed on the capital gain, meaning the difference between your sale price and your cost basis. Long-term gains on shares held more than a year are taxed at 0%, 15%, or 20% depending on income, with a possible additional 3.8% net investment income tax for high earners. Short-term gains on shares held a year or less are taxed as ordinary income. That treatment is generally more favorable than a dividend, which is taxed on the full amount received rather than only on the gain above cost.

The practical significance of Amazon’s program for individual shareholders has been limited so far. Until Amazon either scales up repurchases or dials back employee equity grants, the authorization functions more as a tool management can deploy opportunistically than as a steady return-of-capital strategy.

The 1% Federal Excise Tax on Buybacks

The Inflation Reduction Act of 2022 created an excise tax on stock repurchases under IRC Section 4501, equal to 1% of the fair market value of stock a covered corporation repurchases during the taxable year.³ Amazon qualifies as a covered corporation because its stock trades on an established U.S. securities market.

The tax applies to net repurchases, not gross. Shares issued during the same period, including shares issued to employees through stock compensation plans, reduce the taxable base.³ For Amazon, which issues billions in employee equity each year, the netting rule substantially reduces the tax base. The corporation pays the tax; individual shareholders do not. President Biden and members of Congress proposed raising the rate to 4%, but as of 2026 it remains 1%.

SEC Rules Amazon Operates Under

The core rule is SEC Rule 10b-18, which provides a safe harbor from market manipulation claims for companies that repurchase their own shares under four conditions.⁴

All buyback purchases on any given day must go through a single broker or dealer.
The company cannot make the opening purchase of the day and cannot buy during the final 10 minutes before market close for actively traded securities (or 30 minutes for less liquid stocks).
The purchase price cannot exceed the higher of the highest independent bid or the last independent transaction price.
Total daily purchases cannot exceed 25% of the stock’s average daily trading volume, with a limited exception allowing one block purchase per week.

The safe harbor is voluntary. It does not shield a company that repurchases shares while holding material nonpublic information, or that uses buybacks as part of a scheme to inflate short-term earnings or manipulate the closing price.⁵ Missing any one condition disqualifies that entire day’s purchases from protection.

How Amazon Discloses Repurchases

Regardless of whether a company relies on the safe harbor, SEC Item 703 requires public companies to disclose repurchase activity in quarterly and annual filings. The disclosure is a monthly table showing total shares purchased, the average price paid per share, shares purchased under a publicly announced program, and the remaining authorization.⁶ Any repurchases made outside a publicly announced program must be disclosed separately with an explanation.

The SEC adopted rules in 2023 that would have required daily repurchase reporting, but a federal court vacated those rules later that year.⁷ Amazon’s repurchase disclosures continue to appear on a monthly basis inside its 10-Q and 10-K filings, which is where you’ll find the most current activity if Amazon resumes buying.

1
U.S. Securities and Exchange Commission. Amazon.com, Inc. Form 8-K
2
U.S. Securities and Exchange Commission. Amazon.com, Inc. Annual Report on Form 10-K (2024)
3
Office of the Law Revision Counsel. 26 USC 4501 – Repurchase of Corporate Stock
4
eCFR. 17 CFR 240.10b-18 – Purchases of Certain Equity Securities by the Issuer and Others
5
Securities and Exchange Commission. Division of Trading and Markets – Answers to Frequently Asked Questions Concerning Rule 10b-18
6
eCFR. 17 CFR 229.703 – (Item 703) Purchases of Equity Securities by the Issuer and Affiliated Purchasers
7
Securities and Exchange Commission. Share Repurchase Disclosure Modernization