NY State Senate Bill 2023-S2402

Senate Bill S2402

2023-2024 Legislative Session

Relates to rebates on stock transfer tax paid; dedicates funds of the stock transfer tax fund to the dedicated infrastructure investment fund

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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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to budget and revenue
Jan 20, 2023	referred to budget and revenue

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2023-S2402 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §280-a, Tax L; amd §§92-b & 93-b, St Fin L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S7670
2019-2020: S3315
2021-2022: S270

2023-S2402 (ACTIVE) - Summary

Relates to rebates on stock transfer tax paid; decreases amount to sixty percent; dedicates funds of the stock transfer tax fund to the dedicated infrastructure investment fund.

2023-S2402 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2402

SPONSOR: MYRIE
 
TITLE OF BILL:

An act to amend the tax law, in relation to rebates on stock transfer
tax paid; and to amend the state finance law, in relation to the funds
of the stock transfer tax fund and the dedicated infrastructure invest-
ment fund

 
PURPOSE:

Since at least 1915, New York has imposed a tax on the sale of securi-
ties. Nonetheless, the securities industry flourished in the State. 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 justi-
fiable. New York State has failing infrastructure state-wide. We have
not committed to raising revenue to support our infrastructure needs,
therefore we must raise revenue to address them.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision of section 200-a of the tax law, as amended
by chapter 578 of he laws of 1981 which would make the rebate on trans-
actions 60% of the tax collected subject to the stock transfer tax
occurring on or after October 1, 2019.

Section 2 amends section 92-b of the state finance law, as added by
chapter 91 of the laws of 1965 and as renumbered and subdivision 5 as
added by chapter 3 of the laws of 1966, subdivision 3 as amended by
chapter 878 of the laws of 1977, subdivision 4 as amended by chapter 724
of the laws of 1979 and subdivision 7 as added by section 10 of part SS1
of chapter 57 of the laws of 2008 which require the money used from the
stock transfer tax fund be used to cover the reasonable costs of the
state tax commission in administering, collecting and distributing the
stock transfer tax with the remainder deposited into the account for
dedicated infrastructure investment fund.

Section 3 amends 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, which includes funds transferred form the stock transfer
tax fund.

Section 4 provides the effective date.

 
JUSTIFICATION:

The tax was essentially repealed as part of the campaign to stimulate
the economy through tax cuts and unleashing the financial sector. As
Nobel Prize-winning economist Joseph Stiglitz, who wrote in favor of the
tax, explained in 2013, the economic philosophy at the time encouraged
speculation, did not promote investment, led to economic collapse, and
transferred wealth from the middle class to the top of the economic
spectrum. It brought increasing unemployment and income inequality to
unprecedented levels.

Stiglitz observed that, "A major change occurred in markets around the
turn of this century: most trading (some 61 percent in 2009, 53 percent
in 2010) on the stock exchange was done by computers trading with other
computers, using certain algorithms. Offers to buy and sell were based
not on market research, on informed views about the prospects of, say,
steel or the efficiency of a particular steel company, but rather in
extracting information from the pattern of prices and trades, and on
whatever other information a computer could absorb and process on the
fly.... The financial sector has imposed enormous externalities costs it
does not pay for on the rest of society. The total costs of the finan-
cial crisis for which they bear significant responsibility is in the
trillions of dollars. Flash trading and other speculation may create
volatility, but not really create value: the overall efficiency of the
market economy may even be reduced. Through our bailouts and a myriad of
hidden subsidies, we have in fact been effectively subsidizing the
financial sector."

Other countries have imposed this tax without any reduction in produc-
tivity or efficiency, including Germany, the leading economy in Europe,
England, Japan, and Australia, to name only a few. The revenue is needed
to fund rebuilding our deteriorating infrastructure, scientific
research, and education, all of which have proven historically to cause
economic growth, raise the earning power of the middle class, which
stimulates the economy, and raise many individuals from the poor into
the middle class.

 
LEGISLATIVE HISTORY:

S270 of 2021-22: Referred to Budget and Revenue.

S3315 of 2019-20: Referred to Budget and Revenue.

S7670 of 2018: Referred to Investigation and Government Operations.

 
FISCAL IMPLICATIONS:

As indicated above.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2023-S2402 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2402
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 20, 2023
                                ___________
 
 Introduced  by  Sens.  MYRIE,  COMRIE, JACKSON, RIVERA -- 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 rebates on stock transfer
   tax paid; and to amend the state finance law, in relation to the funds
   of the stock  transfer  tax  fund  and  the  dedicated  infrastructure
   investment fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 1 of section 280-a of the tax law,  as  amended
 by chapter 578 of the laws of 1981, is amended to read as follows:
   1.  Except  as  otherwise  provided  in  subdivision  fifteen  of this
 section, where a tax shall have been paid under this article  a  portion
 of  the  amount paid shall be allowed as a rebate and such portion shall
 be paid to the taxpayer but only to the extent that moneys are available
 for the payment of such rebates in the  stock  transfer  incentive  fund
 established  pursuant  to section ninety-two-i of the state finance law.
 The portion of the amount of tax paid which is to be allowed as a rebate
 shall be thirty percent of the tax incurred  and  paid  on  transactions
 subject  to the stock transfer tax occurring on and after October first,
 nineteen hundred seventy-nine and  on  or  before  September  thirtieth,
 nineteen  hundred  eighty and sixty percent of the tax incurred and paid
 on such transactions occurring on  and  after  October  first,  nineteen
 hundred  eighty  and  on or before September thirtieth, nineteen hundred
 eighty-one and all of the amount of  tax  incurred  and  paid  shall  be
 allowed  as  a  rebate on transactions subject to the stock transfer tax
 occurring on and after October first, nineteen hundred eighty-one AND ON
 OR BEFORE  SEPTEMBER  THIRTIETH,  TWO  THOUSAND  TWENTY-FOUR  AND  SIXTY
 PERCENT  OF  THE  AMOUNT  OF TAX INCURRED AND PAID SHALL BE ALLOWED AS A
 REBATE ON TRANSACTIONS SUBJECT TO THE STOCK TRANSFER  TAX  OCCURRING  ON
 AND AFTER OCTOBER FIRST, TWO THOUSAND TWENTY-FOUR.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00876-01-3

 S. 2402                             2
 
   §  2. Section 92-b of the state finance law, as added by chapter 91 of
 the laws of 1965 and as renumbered and subdivision 5 as added by chapter
 3 of the laws of 1966, subdivision 3 as amended by chapter  878  of  the
 laws  of  1977,  subdivision  4 as amended by chapter 724 of the laws of
 1979  and subdivision 7 as added by section 10 of part SS1 of chapter 57
 of the laws of 2008, is amended to read as follows:
   § 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  reason-
 able  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-FOUR,  [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  adminis-
 tering  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
 ACCOUNT  FOR THE DEDICATED INFRASTRUCTURE INVESTMENT FUND AS ESTABLISHED
 BY SECTION NINETY-THREE-B OF THIS ARTICLE.
   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
 S. 2402                             3

 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 comp-
 troller 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
 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 administer-
 ing, collecting and distributing such tax and such costs in  administer-
 ing  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 pursu-
 ant  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
 S. 2402                             4

 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 commis-
 sioner of taxation and finance.
   [7.  When  all  the notes and bonds of the municipal assistance corpo-
 ration 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  certif-
 ication  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, regu-
 lations 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. Notwith-
 standing any other provisions of  this  article,  to  the  extent  those
 moneys  are  not  required  by the stock transfer incentive fund for the
 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 appro-
 priated to the city of New York for the support of local government.]
   § 3. 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. Any inter-
 est received by the comptroller on moneys on deposit shall  be  retained
 and become part of the fund, unless otherwise directed by law.
   § 4. This act shall take effect immediately.

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Senate Bill S2402

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Zellnor Myrie