Summary of H.R. 7493: Inverted Corporations Tax Bill

Overview

H.R. 7493, the "Inverted Corporations Tax Bill," is a piece of legislation introduced in the U.S. House of Representatives on February 11, 2026. The bill aims to amend the Internal Revenue Code of 1986 to modify the rules relating to inverted corporations.

Key Provisions

The bill proposes the following key changes:

1. Redefining Inverted Corporations: The legislation would revise the definition of an "inverted corporation" to include companies that move their tax domicile overseas through mergers or acquisitions, even if the former U.S. parent company retains a majority ownership stake.

2. Stricter Tax Treatment: Under the new rules, inverted corporations would be subject to harsher tax treatment. They would be treated as domestic corporations for U.S. tax purposes, rather than foreign entities, effectively eliminating the tax benefits of inverting.

3. Retroactive Application: The bill would apply these new rules retroactively to any inversion transactions completed after May 8, 2014, capturing a wider range of companies that have already shifted their tax domiciles abroad.

Potential Impact

If enacted, H.R. 7493 would significantly impact U.S. multinational corporations that have previously inverted or are considering doing so. The stricter tax treatment would remove the financial incentives for companies to pursue inversion strategies, potentially deterring future such transactions.

The retroactive nature of the legislation could also lead to increased tax liabilities for companies that have already completed inversion deals, potentially resulting in higher tax payments and a reduced ability to take advantage of lower foreign tax rates.

Timeline and Next Steps

The bill was introduced in the House of Representatives on February 11, 2026 and has been referred to the House Committee on Ways and Means for further consideration. The legislative process will involve committee hearings, potential amendments, and votes in both the House and Senate before the bill can be sent to the President for signature or veto.