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US SB1821

Bill

Official Source

Status

Introduced

5/20/2025

Primary Sponsor

Thom Tillis

Click for details

Origin

Senate

119th Congress

AI Summary

  • Imposes a new tax on third-party litigation funders equal to the highest individual income tax rate plus 3.8 percentage points on profits received from litigation financing agreements
  • Applies to any individual, corporation, partnership, or sovereign wealth fund (domestic or foreign) that provides financing to parties or law firms in exchange for a share of litigation proceeds
  • Exempts agreements under $10,000 per civil action, loans with interest rates at or below 7% (or twice the 30-year Treasury rate), and financing from related parties
  • Requires withholding of 50% of the applicable tax rate from litigation proceeds before payment to third-party funders
  • Excludes qualified litigation proceeds from gross income and capital gains treatment, effective for taxable years beginning after December 31, 2025

Legislative Description

Tackling Predatory Litigation Funding Act

Taxation

Last Action

Read twice and referred to the Committee on Finance.

5/20/2025

Committee Referrals

Finance5/20/2025

Full Bill Text

No bill text available