Using event study method, this paper examines the effect of the policy of implementing Alternative Minimum Tax (AMT) on stock returns of listed companies and investigates the relationship between firm characteristics and abnormal stock returns during the event period of the AMT legislation process. The results of this study show that the stock market reacted to the AMT policy as a tax-increasing event, resulting in negative abnormal returns. Further, Companies distributing greater employee bonus and tax-exempt investment income experienced greater negative abnormal returns during the AMT event period, and the negative impacts of employee bonus and tax-exempt income were more salient for the electronics industry than the other industries.