SIFMA Highlights Negative Consequences of Proposed Reimposition of New York State Stock Transfer Tax
In a new whitepaper, SIFMA detailed the potential negative implications of legislation that would reimpose a New York State Stock Transfer Tax ("STT").
As previously covered, the New York STT was at one time imposed on the sale or transfer of a stock within New York State at a rate ranging from 1¼ to 5 cents per share. Collection of the STT was effectively eliminated in 1981 through a 100% rebate of any tax imposed.
the New York financial services industry (defined as securities and banking) generated, directly or indirectly, an estimated $21.5 billion in state and local taxes in 2019, or $58,000 per direct employee;
the cost of the SST would be passed to investors and would impact individual savings in 401(k) or 529 plans;
the imposition of the SSTs would likely result in a decline in trading activity, as evidenced by material declines of 16% and 30% in trading activity observed in France and Sweden, respectively, after imposing an STT; and
the imposition of an SST would likely result in a shift of trade executions outside of New York to avoid the tax.