Section 423

Section 423

The government agency responsible for the supervision and regulation of the securities industry and markets, as well as public securities offerings and the ongoing disclosure obligations of public companies.

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Section 423

A section of the Internal Revenue Code governing the taxation of an employee stock purchase plan (ESPP). Under an ESPP, a company allows certain employees to buy its stock at a discount from fair market value. According to Section 423, an employee who holds stock purchased under an ESPP for at least two years does not have to treat the discount as income and therefore does not have to pay taxes on it. Stocks held for this long are called "qualified" because they qualify for favorable tax treatment under Section 423.