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STOCK TRANSFER TAX

Background

The recent recession has been felt hard by state coffers. Revenues have fallen short and local lawmakers are working to shore up gaps in their tax collections. The economic downturn was so dramatic, in fact, that New York may be considering old proposals to impose a tax on each stock transaction that takes place within the state.

If reinstated, this tax (the stock transfer tax) would have devastating consequences for the state. New York would lose significant revenue from business activities and personal income taxes due to job relocations. In fact, the securities industry drives much of the economic growth in the state and city. According to the U.S. Commerce Department, one job on Wall Street supports at least two service jobs. Another critical point: brokers and investors can buy or sell stock anywhere, anytime, anywhere. To remain competitive, New York brokerages could move their trading activities to a state that does not levy this tax.

SIA worked vigorously with New York-based member-firms and key state legislative officials in Albany to ensure that this tax was not included in the 2004 budget. Efforts include a to Governor George Pataki and other legislative leaders. The association continues to monitor this issue as New York and other states revisit this idea in future budgets.

SIA worked vigorously with New York-based member-firms and key state legislative officials in Albany to ensure that this tax was not included in the 2004 budget. Efforts included an op ed in the New York Post by former SIA Board Member Robert Gordon, president, Twenty-First Securities, that outlined the negative consequences of reinstating the STT, and a letter-writing campaign to Governor George Pataki and other legislative leaders. The association continues to monitor this issue as New York and other states revisit this idea in future budgets.

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