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The New York Stock Exchange. (Photo: Alan Kotok.)

N.J. won’t push for tax on stock trades

Murphy, legislature drop possible electronic transaction fee in deal on millionaires tax

By David Wildstein, September 16 2020 8:56 pm

A tax on stock trades floated by Gov. Phil Murphy is off the table as part of a 2021 budget deal that will include a millionaires tax and a middle class tax cut, the New Jersey Globe has learned.

Murphy and legislative leaders have agreed that there will be no further consideration of a proposal to impose a quarter-of-cent tax on every electronic financial transaction.

The decision to drop the transaction tax — at least for now –comes five days after the Wall Street Journal reported that the New York Stock Exchange was threatening to move its data center out of New Jersey if the tax plan was adopted.

Many of the major U.S. stock exchanges run their electronic trading systems out of New Jersey.

From September 28 to October 2, the NYSE is going to run their smallest of five exchanges out of a backup site in Chicago.

The timing of the test is significant, since the state budget must be passed by September 30.

Legislation sponsored by Assemblyman John McKeon (D-West Orange), the chairman of the Assembly Financial Institutions and Insurance Committee, would have imposed the tax on individuals or businesses that process 10,000 or more electronic financial transactions annually.

Murphy did not include the idea in his current budget, but said he was open to supporting it.

Sources told the Globe that concept of a tax on stock trades is not permanently dead.

The New Jersey Globe first reported today that Murphy and the legislative leadership had agreed to a millionaires tax and a middle class tax cut of $500 for about 650,000 families.

This story was updated at 10:35 PM.

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