NY State Senate Bill 2023-S2002

Current Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to budget and revenue
Jan 18, 2023	referred to budget and revenue

2023-S2002 (ACTIVE) - Details

See Assembly Version of this Bill:: A4877
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §270, Tax L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7629, A9748
2021-2022: S4528, A2422

2023-S2002 (ACTIVE) - Summary

Relates to imposing a tax of one-half of one percent on all corporate stock buybacks of issued shares.

2023-S2002 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2002

SPONSOR: MAY
 
TITLE OF BILL:

An act to amend the tax law, in relation to imposing a specific tax on
all corporate stock buybacks of issued shares

 
PURPOSE:

To impose a tax on corporate stock buybacks of issued shares.

 
SUMMARY OF PROVISION:

Section 1 - amends subdivisions 1 and 2 of section 270 of the tax law,
to impose a tax on the reacquisition of stock by a corporation even if
such corporation subsequently cancels such stock.

Section 270 of the tax law is amended by adding a new section 2-a, which
sets the new tax on corporate stock reacquisition at one-half of one
percent of the value paid by such corporation for the shares.

Section 2 - effective date

 
EXISTING LAW:

Current law imposes a tax on the purchase, redemption, or other acquisi-
tion by a corporation of its stock, unless such shares are cancelled
pursuant to section 515 of the Business Corporation Law.

 
JUSTIFICATION:

Following the 2017 federal corporate tax cuts, corporations in the
United States spent a record $1 trillion in 2018 in corporate stock
buybacks. In 2019, corporations spent nearly $1 trillion again buying
back the stock of their shareholders. In the same year that AT&T
announced a three-year, $30 billion stock buyback plan, the company
revealed a third quarter 2019 employment cut of 5,950 jobs, bringing the
total job cuts by the company since the 2017 tax break to 33,778 jobs.

Corporations buy back their stock to inflate its value, enriching share-
holders and executives, whose compensation is often tied to share pric-
es. Trillions of dollars have been spent on stock buy-backs instead of
productive investment that could benefit workers, the economy, and
companies' long-term sustainable growth. A tax on these transactions
could help encourage productive investment while providing needed state
revenue to invest in public education and reduce the property tax burden
on New York's working families. The Roosevelt Institute estimates that a
tax of .5% could generate as much as $3.2 billion in revenues for the
state of New York.

 
LEGISLATIVE HISTORY:

2021-2022 - S.4528 (May) / A.2422 (Niou)

2019-2020 - S.7629 (Metzger) / A.9748 (Niou)

 
FISCAL IMPLICATIONS:

New tax revenue for the state.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S2002 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2002
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 18, 2023
                                ___________
 
 Introduced  by  Sen.  MAY  --  read  twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the tax law, in relation to imposing a specific  tax  on
   all corporate stock buybacks of issued shares
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivisions 1 and 2 of section 270 of the tax law,  subdi-
 vision 1 as amended by chapter 996 of the laws of 1963 and subdivision 2
 as  amended  by  chapter  827 of the laws of 1968, are amended and a new
 subdivision 2-a is added to read as follows:
   1. There is  hereby  imposed  and  shall  immediately  accrue  and  be
 collected  a  tax,  as  herein  provided, on all sales, or agreements to
 sell, or memoranda of sales and all deliveries or transfers of shares or
 certificates of stock, or certificates of rights to  stock,  or  certif-
 icates  of  interest  in  property  or accumulations, or certificates of
 deposit representing certificates taxable under  this  article,  in  any
 domestic or foreign association, company or corporation, or certificates
 of  interest  in business conducted by a trustee or trustees, made after
 the first day of June, nineteen hundred five, whether made upon or shown
 by the books of the association, company, corporation, or trustee, or by
 any assignment in blank, or by any delivery, or by any paper  or  agree-
 ment or memorandum or other evidence of sale or transfer, whether inter-
 mediate  or  final, and whether investing the holder with the beneficial
 interest in or legal title to said stock, or other certificates  taxable
 hereunder, or merely with the possession or use thereof for any purpose,
 or  to secure the future payment of money, or the future transfer of any
 such stock, or certificates.  The purchase, redemption or other reacqui-
 sition of its own shares by a corporation is subject to tax  under  this
 article  [unless]  REGARDLESS  OF  WHETHER  such shares are cancelled on
 reacquisition pursuant to the provisions of section five hundred fifteen
 of the business corporation law, or [unless] WHETHER within one year  of
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00472-01-3

 S. 2002                             2
 
 the  date  of  such  purchase,  redemption  or other reacquisition, such
 shares are cancelled by an appropriate amendment  to  the  corporation's
 certificate  of  incorporation or by action of the board of directors of
 such corporation.
   2.  Except  as otherwise provided by [section two hundred seventy-a of
 this chapter] SUBDIVISION TWO-A OF THIS SECTION, the tax imposed by this
 section shall be two and one-half cents for each share, except in  cases
 where  the shares or certificates are sold, in which cases the tax shall
 be at the rate of one and one-quarter cents for  each  share  where  the
 selling  price  is  less  than  five dollars per share; two and one-half
 cents for each share where the selling price is five dollars or more per
 share and less than ten dollars  per  share;  three  and  three-quarters
 cents  for each share where the selling price is ten dollars or more per
 share and less than twenty dollars per share and  five  cents  for  each
 share where the selling price is twenty dollars or more per share.
   2-A.  NOTWITHSTANDING  THE  PROVISIONS  OF  SUBDIVISION  TWO  OF  THIS
 SECTION, THE TAX IMPOSED BY THIS SECTION FOR THE PURCHASE, REDEMPTION OR
 OTHER REACQUISITION OF ITS OWN SHARES BY A CORPORATION SHALL BE ONE-HALF
 OF ONE PERCENT OF THE VALUE PAID BY SUCH CORPORATION FOR SUCH SHARES.
   § 2. This act shall take effect immediately.

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Senate Bill S2002

Sponsored By

Current Bill Status - In Senate Committee Budget And Revenue Committee

2023-S2002 (ACTIVE) - Details

2023-S2002 (ACTIVE) - Summary

2023-S2002 (ACTIVE) - Sponsor Memo

2023-S2002 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2002

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Sponsored By

Rachel May

Current Bill Status - In Senate Committee Budget And Revenue Committee

2023-S2002 (ACTIVE) - Details

2023-S2002 (ACTIVE) - Summary

2023-S2002 (ACTIVE) - Sponsor Memo

2023-S2002 (ACTIVE) - Bill Text download pdf

Comments