What's happening
This bill imposes an additional tax on companies with high CEO-to-median worker pay ratios as reported to the SEC.
Why it matters
Targets companies with large pay gaps between CEOs and median workers. , creating a direct financial incentive for firms to limit executive compensation or raise median employee pay to avoid the higher tax rate.
Uses existing SEC pay ratio disclosures as the trigger. , meaning companies already subject to federal reporting will have their published data used to calculate state tax liability, reducing administrative burden but increasing the stakes of these disclosures.
Establishes a tiered penalty system. companies with CEO-to-median worker pay ratios between 100:1 and 250:1 face a 10% increase in their base state tax liability, while those with ratios of 250:1 or higher face a 25% increase, potentially resulting in substantially higher tax bills for firms with extreme pay disparities.
Could influence corporate behavior beyond New York. because large, publicly traded companies often operate nationally, the law could prompt wider changes in executive compensation practices or wage structures to mitigate the impact of the tax.
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Who cares
Companies subject to SEC pay-ratio reporting
They would owe an annual tax of 10% of base tax liability for reported pay ratios of at least 100 to 1 but below 250 to 1, or 25% for ratios of 250 to 1 or higher.
Corporate tax and finance teams
They would need to account for the additional tax beginning with tax years commencing on or after January 1, 2026.
New York State tax administrators
They would administer a new annual tax tied to companies’ pay ratios reported in SEC disclosures.
Headline styles
Tax High CEO Pay Ratios
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 42
History
- Referred to investigations and government operations
- Referred to investigations and government operations
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 Gaps
In Assembly Committee · Ways And Means · Sponsor Ron Kim
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
323
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sens. SKOUFIS, JACKSON, KRUEGER, RIVERA, SALAZAR, SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
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.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to imposing a tax related to executive compensation
Purpose
Requires that certain companies pay an annual tax if the chief executive receives compensation 100 to 250 times greater than the median pay of all their employees.
Summary of provisions
Section 1: The tax law is amended by adding section 183-b which creates a tax on companies subject to United States Securities and Exchange Commission pay ratio reporting requirements section 229.402 of title 17 of the code of federal regulations, at the rate of 10% if the company reports that the CEO makes one hundred times the median pay of all their workers, and at the rate of 25% if the company reports that the CEO makes two hundred fifty times the median pay of all their workers.
Section 2: Sets the effective date.
Justification
Our state and nation are experiencing unprecedented levels of income inequality. Executive compensation has reached historic highs, while many workers have gone years or decades without meaningful wage increases. This disparity persists despite the fact that the achieve- ments and profitability of any company are only made possible through the collective efforts of its entire workforce. This bill seeks to ensure all workers are treated with respect and dignity - and that not all profits exclusively go to the very top of the corporate structure.
Legislative history
Senate
2017: No Senate Same-As 2018: No Senate Same-As
2019: S1659, Reported and Committed to Finance
2020: S1659, Referred to Investigations and Government Operations
2021: S1813, Referred to Investigations and Government Operations
2022: S1813, Referred to Investigations and Government Operations
2023: S2858, Referred to Investigations and Government Operations
2024: S2858, Referred to Investigations and Government Operations
Assembly
2017: A6236-A, Referred to Ways and Means
2018: A6236-A, Amend and Recommit to Ways and Means
2019: A7454, Referred to Ways and Means
2018: A6236A, Referred to Ways and Means
2020: A7454, Referred to Ways and Means
2021: A3691, Referred to Ways and Means
2022: A3691, Referred to Ways and Means
2023: A2582, Referred to Ways and Means
2024: A2582, Referred to Ways and Means
Fiscal implications
None.
Effective date
This act shall take effect January 1, 2026 and shall apply to all 20 tax years commencing on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.