What's happening
This bill imposes an additional tax on companies with high CEO-to-median worker pay ratios, starting January 1, 2020.
Why it matters
Targets Large Public Companies. This tax specifically applies to companies that are required to report CEO-to-median worker pay ratios to the SEC, meaning it focuses on large, publicly traded corporations rather than small businesses or private companies.
Creates Financial Incentives to Reduce Pay Gaps. By imposing a significant additional tax (10% or 25% of base tax liability) on companies with high executive-to-worker pay disparities, the bill puts financial pressure on firms to narrow the gap between top and median employee compensation.
Leverages Existing Federal Reporting. The legislation relies on already-mandated SEC disclosures, minimizing administrative burden and making enforcement straightforward, as pay ratio data is already collected and public.
Could Influence Corporate Pay Structures Nationally. Although it only applies in New York, the bill may prompt affected companies to reconsider executive compensation policies on a broader, possibly national, scale to avoid higher taxes in one of the country’s major economic centers.
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Who cares
Headline styles
Tax High CEO Pay Gaps
Plain English, a few words. Used as the page title.
Sponsors
Assembly Member · Assembly District 40
2 Co-sponsors
History
- Referred to ways and means
- Referred to ways and means
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tax High Executive Pay Ratios
In Senate Committee · Investigations And Government Operations · Sponsor James Skoufis
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7454
2019-2020 Regular Sessions
IN ASSEMBLY
May 3, 2019
Introduced by M. of A. KIM -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to imposing a tax related to executive compensation
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 183-b to read as follows:
§ 183-b. Tax on companies subject to United States securities and exchange commission pay ratio reporting requirements. Notwithstanding any other provision of this chapter, or of any other law, for the period beginning with the taxable years commencing on or after the first day of January, two thousand twenty, an annual tax is hereby imposed upon every company subject to the United States securities and exchange commission pay ratio reporting requirements, pursuant to section 229.402 of title 17 of the code of federal regulations, at the rate of ten percent of base tax liability if such company reports to the United States securities and exchange commission a pay ratio of at least one hundred to one but less than two hundred fifty to one on United States securities and exchange commission disclosures; or at the rate of twenty-five percent of base tax liability if such company reports to the United States securities and exchange commission a pay ratio of two hundred fifty to one or greater on United States securities and exchange commission disclosures.
§ 2. This act shall take effect January 1, 2020 and shall apply to all tax years commencing on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04324-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.