US SB2818

Corporations with CEO-to-median-worker pay ratios exceeding 50:1 face increases to the standard 21% corporate tax rate, ranging from 0.5 percentage points (ratios 50:1-100:1) up to 5 percentage points (ratios above 500:1)

Pay ratio calculations use a 5-year annualized average of compensation and apply to whichever employee is highest paid, not just the CEO

Private corporations with less than $100 million in average annual gross receipts over the prior 3 years are exempt from the tax increase

Large private corporations ($100 million+ in gross receipts) not subject to SEC filing requirements must calculate and report pay ratios under Treasury Department regulations

Effective for taxable years beginning after December 31, 2025, with Treasury directed to issue anti-avoidance regulations addressing workforce manipulation such as replacing employees with contractors