What's happening
This bill repeals the stock transfer tax rebate, redirects stock transfer tax revenues to infrastructure, housing, and transit projects, and creates a safe water infrastructure program.
Why it matters
Ends the automatic rebate for the stock transfer tax. , meaning stock trades in New York will now generate significant new state revenue from this tax, potentially increasing costs for financial firms but generating funds for public purposes.
Directs stock transfer tax revenue to a wide array of infrastructure priorities. , including public transit (especially the MTA), public housing repairs, highways and bridges, rail (including Amtrak’s Northeast Corridor), local roads, and clean energy investments, potentially accelerating improvements in these critical sectors.
Establishes a new Safe Water Infrastructure Action Program. , providing a dedicated and predictable funding stream for the repair and maintenance of municipally-owned drinking water, stormwater, and sanitary sewer systems—helping local governments address urgent water infrastructure needs and public health concerns.
Widens the scope of transactions subject to the stock transfer tax. , by clarifying that almost any activity related to stock transactions with a New York nexus will be taxable, potentially capturing more financial activity and raising additional revenue for the state.
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Who cares
Headline styles
End Stock Tax Rebates
Plain English, a few words. Used as the page title.
Sponsors
History
- Print number 6203a
- Amend and recommit to budget and revenue
- Referred to budget and revenue
- Referred to budget and revenue
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.
End Stock Tax Rebates
In Assembly Committee · Ways And Means · Sponsor Phil Steck
Full text
6 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6203--A
2019-2020 Regular Sessions
IN SENATE
May 22, 2019
Introduced by Sens. SANDERS, BIAGGI, HOYLMAN, JACKSON, MYRIE, RAMOS, RIVERA, SALAZAR -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -- recommitted to the Committee on Budget and Revenue in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the state finance law, in relation to the repeal of the rebate for stock transfer tax paid and the funds of the stock transfer tax fund and the dedicated infrastructure investment fund; to amend the environmental conservation law, in relation… Show allHide
AN ACT to amend the state finance law, in relation to the repeal of the rebate for stock transfer tax paid and the funds of the stock transfer tax fund and the dedicated infrastructure investment fund; to amend the environmental conservation law, in relation to establishing the safe water infrastructure action program for the purpose of making payments toward the replacement and rehabilitation of existing local municipally-owned and funded drinking water, storm water and sanitary sewer systems; to amend the tax law, in relation to taxes imposed in certain transactions; to repeal section 280-a of the tax law relating to the rebate for stock transfer tax paid; to repeal section 92-i of the state finance law relating to the stock transfer incentive fund; and to repeal certain provisions of the administrative code of the city of New York relating thereto
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 280-a of the tax law is REPEALED.
§ 2. Section 92-i of the state finance law is REPEALED.
§ 3. Section 92-b of the state finance law, as added by chapter 91 of the laws of 1965, subdivision 3 as amended by chapter 878 of the laws of 1977, subdivision 4 as amended by chapter 724 of the laws of 1979, subdivision 5 as added and subdivision 6 as renumbered by section 2 of chapter 3 of the laws of 1966, subdivision 7 as added by section 10 of part SS1 of chapter 57 of the laws of 2008 and such section as renumbered by section 1 of chapter 3 of the laws of 1966, is amended to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09894-08-0
S. 6203--A 2
§ 92-b. Stock transfer tax fund. 1. There is hereby established in the custody of the commissioner of taxation and finance a special fund, to be known as the stock transfer tax fund.
2. Such fund shall consist of the revenues derived from the stock transfer tax imposed by article twelve of the tax law and all other moneys credited or transferred thereto from any other fund or source pursuant to law.
3. The moneys received from such tax and other sources in such fund[, after deducting the amount the commissioner of taxation and finance shall determine to be necessary for] shall be used to cover the reasonable costs of the state tax commission in administering, collecting and distributing [such] the stock transfer tax, commencing with the fiscal year ending March thirty-first, [nineteen hundred seventy-seven] two thousand twenty-two, [shall be appropriated to (i) the municipal assistance corporation for the city of New York created pursuant to title three of article ten of the public authorities law in order to enable such corporation to fulfill the terms of any agreements made with the holders of its notes and bonds and to carry out its corporate purposes including the maintenance of the capital reserve fund and (ii) to the extent such moneys are not required by such corporation as provided in subdivision seven of section ninety-two-d of this chapter and, after deducting the amount such commissioner shall determine to be necessary for reasonable costs of the state tax commission in administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund, to the stock transfer incentive fund created pursuant to section ninety-two-i of this chapter to enable rebates to be made from such fund under the provisions of section two hundred eighty-a of the tax law and (iii) to the extent such moneys are not required by such fund, as certified by the commissioner of taxation and finance, the balance shall be appropriated to the city of New York, for the support of local government.] and the remainder shall be deposited into the state general fund. Commencing with the fiscal year ending March thirty-first, two thousand twenty-three, such remainder shall be deposited into the following funds:
(i) twenty-five percent shall be directed to the metropolitan transportation authority financial assistance fund established pursuant to section ninety-two-ff of this article;
(ii) ten percent shall be directed to the division of housing and community renewal for the purpose of capital projects and other improvements to address issues relating to conditions of governance and habitability, including but not limited to, heating, mold, or lead, and other such conditions affecting the health and safety of tenants at housing developments owned or operated by the New York city housing authority;
(iii) fifteen percent shall be directed to the highway and bridge capital account in the dedicated highway and bridge trust fund established pursuant to section eighty-nine-b of this article;
(iv) ten percent shall be directed to the dedicated highway and bridge trust fund established pursuant to section eighty-nine-b of this article, to be directed towards the infrastructure, maintenance and development of rail lines for AMTRAK in the northeast corridor;
(v) five percent shall be directed to the local infrastructure account of the general fund established pursuant to section seventy-two of this article to be directed to the Consolidated Local Street and Highway Improvement Program (CHIPS);
S. 6203--A 3
(vi) five percent shall be directed to the local infrastructure account of the general fund to be dedicated to the safe water and infrastructure action program as established by section 3-0323 of the environmental conservation law;
(vii) five percent shall be directed to the municipal assistance state aid fund established pursuant to section ninety-two-e of this article;
(viii) five percent shall be directed to the dedicated mass transportation trust fund to the credit of the non-MTA account for payment to downstate transit systems other than those transit systems operated by the metropolitan transportation authority;
(ix) five percent shall be directed to the dedicated mass transportation trust fund to the credit of the non-MTA account for payment to upstate transit systems; and
(x) fifteen percent shall be directed to the energy research and development operating fund pursuant to the provisions of section eighteen hundred fifty-nine of the public authorities law, to be directed to the clean energy fund and shall be divided equally among the four investment portfolios that make up such fund.
4. [After the deduction of such costs of the state tax commission in administering, collecting and distributing such tax, the balances in the stock transfer tax fund so appropriated shall be distributed and paid on the last business day of September, December, March and June into the special account established for the municipal assistance corporation for the city of New York in the municipal assistance tax fund established pursuant to subdivision one of section ninety-two-d of this chapter, unless and to the extent the balances in such fund on each such payment day are not required by such corporation as provided in said subdivision seven of said section ninety-two-d in which case the balance not so required, if any, after the deduction of such costs of the state tax commission in administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund shall be distributed and paid to the stock transfer incentive fund in the custody of the commissioner of taxation and finance established pursuant to section ninety-two-i of this chapter and unless and to the extent that the balances in the stock transfer tax fund on each such payment day are not required by the stock transfer incentive fund as provided in such section ninety-two-i of this chapter in which case the balance not so required, if any, shall be distributed and paid to the chief fiscal officer of the city of New York to be paid into the treasury of the city to the credit of the general fund or paid by the commissioner of taxation and finance to such other account or fund as may be designated in writing by such chief fiscal officer at least ten business days prior to such last day and on each such day, the commissioner of taxation and finance shall certify to the comptroller the amount deducted for administering, collecting and distributing such tax during such quarterly period and shall pay such amount into the general fund of the state treasury to the credit of the state purposes fund therein. In no event shall any amount (other than the amount to be deducted for administering, collecting and distributing such tax) be distributed or paid from the stock transfer tax fund to any person other than the municipal assistance corporation for the city of New York unless and until the aggregate of all payments certified to the comptroller as required by such corporation in order to comply with its agreements with the holders of its notes and bonds and to carry out its corporate purposes, including the maintenance of the capital reserve fund, which remain unappropriated or unpaid to such corporation shall
S. 6203--A 4
have been appropriated to such corporation and shall have been paid in full provided, however, that no person, including such corporation or the holders of its notes or bonds shall have any lien on such tax and such agreements shall be executory only to the extent of the balances available to the state in such fund. If the balances in such fund are not required by such corporation pursuant to the provisions of this subdivision, on each such last business day of September, December, March and June, the commissioner of taxation and finance shall certify to the comptroller the amount deducted for administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund during such quarterly period and he shall pay such amount into the general fund of the state treasury to the credit of the state purposes fund therein. To the extent such moneys are not required by such corporation, as provided in subdivision seven of section ninety-two-d of this chapter, no amount thereof (other than such amount to be deducted for administering, collecting and distributing such tax and such costs in administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law from the stock transfer incentive fund) shall be distributed or paid from the stock transfer tax fund other than to such stock transfer incentive fund in the custody of the commissioner of taxation and finance unless and until the aggregate of all payments certified to the comptroller by such commissioner pursuant to the provisions of such incentive fund as necessary to provide payments on account of rebates authorized pursuant to section two hundred eighty-a of the tax law which remain unappropriated or unpaid to such fund shall have been appropriated to such fund and shall have been paid in full provided, however, that no person, including any taxpayer under article twelve of the tax law or any member or dealer referred to in subdivisions two-a and six of section two hundred eighty-a of such law, shall have any lien on this fund or the stock transfer incentive fund.
5. In no fiscal year shall the total amount paid from the fund exceed the total collections during such fiscal year from the stock transfer tax pursuant to the provisions of article twelve of the tax law and as deposited to the credit of the stock transfer tax fund.
6.] All payments from the stock transfer tax fund shall be made on the audit and warrant of the comptroller on vouchers approved by the commissioner of taxation and finance.
[7. When all the notes and bonds of the municipal assistance corporation for the city of New York have been fully paid and discharged, together with interest thereon and interest on unpaid installments of interest, and the chairman of the corporation makes the final certification required by subdivision seven of section ninety-two-d of this article, the comptroller must notify the commissioner of taxation and finance that all remaining funds held in the stock transfer tax fund must be released to the stock transfer incentive fund. From that time forward, all funds previously deposited in the stock transfer tax fund pursuant to subdivision two of this section will be deposited directly into the stock transfer incentive fund pursuant to all the rules, regulations or instructions that the commissioner may prescribe, after deducting the amount the commissioner determines to be necessary for reasonable costs of the department in administering, collecting and distributing the tax imposed by article twelve of the tax law. Notwithstanding any other provisions of this article, to the extent those moneys are not required by the stock transfer incentive fund for the
S. 6203--A 5
purpose of administering and making distributions in accordance with the provisions of section two hundred eighty-a of the tax law, as certified by the commissioner of taxation and finance, the balance will be appropriated to the city of New York for the support of local government.]
§ 4. Paragraph (c) of subdivision 1 of section 93-b of the state finance law, as added by section 1 of part H of chapter 60 of the laws of 2015, is amended to read as follows:
(c) Sources of funds. The sources of funds shall consist of all moneys collected therefor, or moneys credited, appropriated or transferred thereto from any other fund or source pursuant to law or any other moneys made available for the purposes of the fund, including but not limited to funds transferred from the stock transfer tax fund pursuant to subdivision three of section ninety-two-b of this article and funds transferred from the stock transfer incentive fund established by section ninety-two-i of this article and repealed by a chapter of the laws of two thousand twenty, which amended this paragraph. Any interest received by the comptroller on moneys on deposit shall be retained and become part of the fund, unless otherwise directed by law.
§ 5. Subdivision (c) of section 11-503 of the administrative code of the city of New York is REPEALED.
§ 6. Subdivision 12 of section 11-604 of the administrative code of the city of New York is REPEALED.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the state finance law, in relation to the repeal of the rebate for stock transfer tax paid and the funds of the stock transfer tax fund and the dedicated infrastructure investment fund; to amend the environmental conservation law, in relation to establishing the safe water infrastructure action program for the purpose of making payments toward the replacement and rehabilitation of existing local municipal- ly-owned and funded drinking water, storm water and sanitary sewer systems; to amend the tax law, in relation to taxes imposed in certain transactions; to repeal section 280-a of the tax law relating to the rebate for stock transfer tax paid; to repeal section 92-i of the state finance law relating to the stock transfer incentive fund; and to repeal certain provisions of the administrative code of the city of New York relating thereto
Purpose or general idea of bill
To repeal the electronic rebate of the stock transfer tax, collect 100% of this tax and dedicate the funds to the state general fund commencing with the fiscal year and ending March 31, 2023, after which 100% of the funds collected with the deposited into the following: the Metropolitan Transportation Authority (MTA), the maintenance and repair of state highways and bridges (NYSDOT), the New Your City Housing Authority (NYCHA), the infrastructure, maintenance and development of passenger rail lines for AMTRAK in the northeast corridor, the Consolidated Local Street and Highway Improvement Program (CHIPS), the municipal aid and incentives program (AIM), the safe water and infrastructure action program, the downstate and upstate transits systems and the clean energy fund.
Summary of provisions
Section 1. To repeal the electronic rebate of the stock transfer tax, collect 100% of this tax and dedicate the funds to the state general fund commencing with the fiscal year and ending March 31, 2023, after which 100% of the funds collected will be deposited into the following:
Read the full memo (1,552 words)
i. Twenty-five percent shall be directed to the Metropolitan Transpor- tation Authority(MTA)Financial Assistance fund
ii. Ten percent shall be directed to the maintenance and repair of the New York City Housing Authority (NYCHA)
iii. Fifteen percent shall directed to the Highway and Bridge Capital Account in the dedicated highway and bridge trust fund (NYSDOT)
iv. Ten percent shall be directed towards the infrastructure, mainte- nance and development of passenger rail lines for AMTRAK in the North- east Corridor
v. Five percent shall be directed to the Consolidated Local Street and Highway Improvement Program (CHIPS)
vi. Five percent shall be directed to the safe water and infrastructure action program (SWAP: as established by section 8) vii. Five percent shall be directed to the Municipal Assistance State Aid Fund (AIM)
viii. Five percent shall be directed to the Downstate Transit System
ix. Five percent shall be directed to the Upstate Transit System
x. Fifteen percent shall be directed to the Clean Energy Fund (NYSER- DA)
Section 8: Establishes the Safe Water and Infrastructure Action Program; a stream of funding to local governments state-wide for the repair, maintenance and capital improvement of drinking water, storm water and sewer systems
Section 9: Provides for the stock transfer tax to be collected should any activity in furtherance of the transaction occur in the State of New York or if any party involved in the transaction satisfies anexus with New York State which shall be defined as broadly as it is permitted under the United States constitution.
Section 10: Effective Date.
Justification
From 1905 to 1981, New York State imposed a tax on the sale of securi- ties. The State began rebating the tax in 1979 so that it is now 100% rebated back to the industry. As explained below, the 100% rebate is no longer justifiable.
New York State has failing infrastructure state-wide. Roads, bridges, the New York City Housing Authority, public transit both upstate and downstate, passenger rail, water and sewer infrastructure, are all in massive disrepair.
To transform New York State's failing infrastructure, we must commit to raising revenue. Conservatively, the stock transfer tax will raise approximately $13 billion annually (based upon a 10 year average of collections). There is no other revenue stream, with the exception of the raising the state income tax, that will immediately raise this level of revenue.
For years New York State has not committed to raising the revenue neces- sary to fund such basic programs as CHIPS and AIM to a level that can actually achieve results. Our passenger rail system is multiple decades behind those of Europe and our public transportation system in the city of New York is being supported by fees and taxes on low- and middle-in- come individuals.
On February 15, 2019, Comptroller DiNapoli issued a statement warning that state revenue is sagging and released the January revenue numbers showing a decline in projected revenue to the state of more than $2 billion. In that statement, DiNapoli said the state needs to prepare for the economy slowing down.
"New York's revenue picture is increasingly challenged. The final Janu- ary revenue numbers for the state released by my office today confirm the substantial shortfall the Governor and I announced earlier this month. In addition, the Division of the Budget's updated financial plan reduces projected tax receipts in the coming years by billions of dollars," DiNapoli said in a statement.
"Given the unpredictable revenue environment we now face, we should take an extremely cautious approach when negotiating next year's budget. As one step, I urge the Governor and Legislature to make the prudent finan- cial decision to substantially build up the state's reserves to help better prepare for an economic downturn."
The stock transfer tax is a revenue generator that operates as an indi- rect tax, rather than a direct tax like property or income. Stocks are also predominantly owned by the wealthiest of Americans. The top 10% of American households, as defined by total wealth, now own 84% of all stocks in 2016, according to a recent paper by NYU economist Edward N. Wolff. Furthermore, while virtually all (94%) of the very rich reported having significant stock holdings-as defined as $10,000 or more in shares-only 27% of the middle class did.
(The study framed that middle class as the group between the poorest 20% and the richest 20A of Americans--"The Richest 10% of Americans Now Own 84% of All Stocks" By ROB WILE Money Magazine December 19, 2017)
The stock transfer tax is infinitesimal, as the schedule from the New York State Department of Taxation and Finance shows below:
Sale or agreement to sell at less than $5 per share 1 1/4
SALE AT $5 OR MORE BUT LESS THAN $10 PER SHARE 2 1/2
SALE AT $10 OR MORE BUT LESS THAN $20 PER SHARE 3 3/4
SALE AT $20 OR MORE PER SHARE 5
TRANSFERS OF STOCK OR CERTIFICATES OF INTEREST OTHER THAN BY SALE 2 1/2
WHILE THE TAX ITSELF IS INFINITESIMAL, THE VOLUME OF TRADING IS WHAT DRIVES THIS REVENUE STREAM TO AT LEAST $13 BILLION. DURING FINANCIAL CRISES, TRADING VOLUME INCREASES (THUS INCREASING THE STOCK TRANSFER TAX REVENUE), WHILE INCOME AND PROPERTY TAX REVENUES DECREASE. THIS REVENUE WILL OFFSET DECREASED STATE INCOME TAX COLLECTIONS AND LOCAL PROPERTY TAX COLLECTIONS AND HAS THE POTENTIAL TO STABILIZE OUR STATE BUDGET WHEN OUR DIRECT TAX REVENUES ARE FALLING. WHICH, ACCORDING TO COMPTROLLER DINAPOLI, IS HAPPENING NOW. DUE TO RECENT GLOBAL EVENTS, NEW YORK STATE FINDS ITSELF IN A FISCAL CRISIS THAT MUST BE ADDRESSED, AND MAKES THIS LEGISLATION IS ALL THE MORE NECESSARY,
ADDITIONAL BENEFITS OF THIS LEGISLATION WOULD BE THE ECONOMIC BOOM CREATED BY THIS REVENUE STREAM IN EMPLOYMENT, CONSTRUCTION MATERIALS AND OTHER ANCILLARY BUSINESSES. WITH SIGNIFICANT INVESTMENT IN INFRASTRUC- TURE, PROPERTY VALUES INCREASE BENEFITTING LOCAL GOVERNMENTS INCLUDING SCHOOL DISTRICTS. UNLIKE THE TEMPORARY FEDERAL INVESTMENT IN INFRASTRUC- TURE FOLLOWING THE GREAT RECESSION OF 2008, THIS WOULD BE AN ANNUAL COLLECTION AND INVESTMENT. THIS LEGISLATION ALSO DIRECTS INVESTMENT INTO THE CLEAN ENERGY FUND, WHICH WOULD SPUR DRAMATIC GROWTH IN THE RENEWA- BLES SECTOR WITH THE GOAL OF ENDING OUR DEPENDENCE ON FOSSIL FUELS.
SHOULD WE ENACT THIS LEGISLATION, THE FOLLOWING SCHEDULE INDICATES AN AVERAGE THE AMOUNT OF ANNUAL REVENUE THAT COULD BE ACHIEVED (BASED UPON THE 10 YEAR AVERAGE IN STOCK TRANSFER TAX COLLECTIONS:
STOCK TRANSFER TAX REVENUE ANNUAL ENTITY % COLLECTION AREAS SERVED ------------------------------------------------------------------------- METROPOLITAN TRANSPORTATION 25% $3,250,000,000 NYC, LONG AUTHORITY (MTA) ISLAND, SOUTHEASTERN NEW YORK AND CONNECTICUT
NEW YORK CITY HOUSING AUTHORITY10% $1,300,000,000 CITY OF (REPAIRS) NEW YORK
DEDICATED HIGHWAY AND BRIDGE 15% $1,950,000,000 STATE OF NEW TRUST FUND (NYSDOT) {DISBURSED YORK TO THE HIGHWAY AND BRIDGE CAPITAL PROGRAM}
AMTRAK 10% $1,300,000,000 STATE OF
CONSOLIDATED HIGHWAY IMPROVE- 5% $650,000,000 STATE OF MENT PROGRAM (CHIPS) NEW YORK
SAFE WATER ACTION PROGRAM 5% $650,000,000 STATE OF (SWAP) NEW YORK
AID AND INCENTIVES TO 5% $650,000,000 ALL MUN- MUNICIPALITIES (AIM) ICIPALITIES OUTSIDE OF NYC
DOWNSTATE TRANSIT 5% $650,000,000 ROCKLAND, NYC, SI FERRY, WESTCHESTER, SUFFOLK, NYCDOT, NYSDOT TRANS- HUDSON AND DOWNSTATE FORMULA SYSTEMS
UPSTATE TRANSIT 5% $650,000,000 CDTA, CNYRTA AND REMAIN- ING UPSTATE FORMULA SYSTEMS
CLEAN ENERGY FUND (NYSER$1,950,000,000/4= STATE OF {APPROPRIATED TO NYSERDA AND NEW YORK DIVIDED EQUALLY AMONG THE 4 INVESTMENT PORTFOLIOS} MARKET DEVELOPMENT: $487,500,000 NY-SUN: $487,500,000 NY GREEN BANK: $487,500,000 INNOVATION AND RESEARCH: $487,500,000 -------------------------------------------------------------------------
Legislative history
NEW BILL
Fiscal implications
AS INDICATED.
Effective date
APRIL 1, 2021
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.