What's happening
This bill imposes an extra tax on companies with high executive-to-median worker pay ratios, starting January 1, 2026.
Why it matters
Targets large, publicly traded companies. Only companies required to report CEO-to-median worker pay ratios to the SEC (generally large, publicly traded firms) are affected, potentially leaving smaller or privately held companies untouched.
Creates steep tax penalties based on pay disparity. Companies with a CEO-to-median worker pay ratio of 100:1 up to 250:1 face a 10% surcharge on their existing state tax liability, while those with ratios of 250:1 or higher face a much larger 25% surcharge, incentivizing companies to reconsider executive compensation structures.
May influence corporate wage policies. By tying state tax costs directly to pay gaps, the legislation could pressure companies to raise median worker pay, lower executive pay, or both, in order to reduce their tax burden.
Could affect business decisions and competitiveness. The additional tax burden may influence where companies choose to expand, locate, or maintain operations within New York, and could fuel debate over the balance between addressing income inequality and maintaining a business-friendly environment.
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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 CEO 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
970
2025-2026 Regular Sessions
IN ASSEMBLY (Prefiled)
January 8, 2025
Introduced by M. of A. KIM, EPSTEIN, EACHUS -- 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-six, 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, 2026 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.
LBD00896-01-5
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.