On behalf of organizations representing more than 544,000 workers in the financial services industry in New York State, ADISA co-signed letters to the Honorable Andrew Cuomo, Governor of New York State; the Honorable Andrea Stewart-Cousins, President Pro Tempore and Majority Leader; and the Honorable Carl Heastie, Speaker of the Assembly, to express opposition to re-imposing any form of a New York State Stock Transition Tax (STT). Such a tax would damage New York’s position as a global financial capital, resulting in shrinkage of an industry that is the largest contributor to our economy and tax base.
 
New York State eliminated collection of a STT in 1981, in response to market globalization and significant technological changes affecting market transactions. During these unprecedented and critical times, a STT targeted at the financial markets will impair New York State’s economy, adversely impact the state’s business environment, and increase the cost of investing for everyday savers and investors.
 
The letters encourage New York State’s General Assembly to consider the following:

• This is a Tax on End Investors. Imposing a STT on savers and investors in New York State runs counter to many longstanding policies promoting personal savings and investment in the state, and the cost of any amount of the STT would ultimately be passed on to both large and small investors. 
• Revenue Decline. Faced with a STT in New York State, firms are likely to relocate trading activity outside of the State to offer a better price for their clients, taking jobs and related economic activity with them. Moreover, if New York imposes any STT, firms that process trades in the state could risk potential non-compliance with FINRA’s “best execution” rule that requires broker-dealers to find the most favorable price for customers when buying and selling securities. No other state in the country imposes a STT, and increasingly we are seeing broker-dealer activities move to other states. According to the New York State Comptroller’s 2020 report on the securities industry in New York City, in 2018, the securities industry was responsible for more than 17% of all economic activity in New York City, and made up 5.9% of the State’s economy. Imposing a STT could lead to financial firms moving their back-office operations and the related jobs outside of New York. This would reduce employment and revenue in the state.
• Unsuccessful Experiments with a STT. In the European Union, there are 27 countries that have some regulatory barriers for companies to move their operations from one country to another, so the ability to relocate brokerage activity due to a national STT is limited. In sharp contrast, if New York State were to impose a STT, there are no such barriers to prevent businesses to move to one of the 49 states without the tax. The signed organizations appreciate the opportunity to share their significant concerns on imposing a STT in New York State, and cannot express strongly enough the economic harm a STT could have on the state’s retirement savers, investors, businesses and the economy.

The same letter was sent to all three leaders. You can read the letter to Gov. Cuomo in its entirety here.

The signatories include:
Alternative & Direct Investment Securities Association
American Council of Life Insurers
American Retirement Association
American Securities Association
Business Council of New York State
Business Council of Westchester
Coalition to Prevent the Taxing of Retirement Savers
Council on State Taxation
Equity Markets Association
Financial Planning Association
Financial Services Institute
Foreign Exchange Professionals Association
Futures Industry Association – Principal Traders Group
Institute of International Bankers
Insured Retirement Institute
Investment Company Institute
Life Insurance Council of New York, Inc.
Long Island Association
Managed Funds Association
Modern Markets Initiative
NASDAQ
New York Bankers Association
New York State Economic Development Council
New York Stock Exchange
Partnership for New York City
Securities Industry & Financial Markets Association
SPARK Institute