The "Big Beautiful Bill" (OBBB) includes a 1% excise tax on certain cross-border transfers, effective for funds sent outside the U.S. beginning January 1, 2026.
It's already generating discussion - but a few critical realities haven't made it into the mainstream conversation yet.
What's Not Being Said (But Should Be):
1. This tax is in addition to FIRPTA.
There's no offset.
Foreign sellers who already face 15% FIRPTA withholding may now be subject to an additional 1% excise tax if proceeds are wired abroad.
That's 16% held up at closing - even when the actual tax liability is much lower.
2. It applies to more than just sales proceeds.
This isn't limited to FIRPTA transactions.
Returned earnest money, buyer deposits, escrow refunds - if they're wired to a foreign account, they may be subject to the tax.
3. U.S. citizens aren't exempt.
The statute applies based on destination, not residency.
If a U.S. citizen requests funds be wired to a non-U.S. account, the 1% may still apply.
4. Guidance is still developing - but exposure begins January 2026.
The law doesn't yet clarify:
- Who calculates or remits the tax
- How exemptions might be applied
- Whether responsibility falls on the sender, intermediary, or financial institution
Until that's resolved, it's wise for anyone facilitating international wires - including settlement and escrow professionals - to begin internal discussions about policy, flagging, and client advisories.
The Opportunity:
This isn't a fault issue - it's a shared visibility challenge.
The earlier we name it, the better we protect everyone at the table.
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Kat Rodgers
Foreign Tax CPA, LLC
Cocoa Beach FL
+1 (321) 784-8329
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