NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A190
SPONSOR: Buchwald
 
TITLE OF BILL: An act to amend the tax law, in relation to authoriz-
ing certain taxpayers who are entitled to a one hundred percent rebate
of certain stock transfer taxes not to pay such taxes
 
PURPOSE:
To end the rather nonsensical practice of collecting a tax on the sale
or transfer of stock when New York State is already obligated to fully
rebate the tax payment.
 
SUMMARY OF PROVISIONS:
The Tax Law is amended by adding a new section 281-b which authorizes
taxpayers who are entitled to 100% rebate of certain stock transfer
taxes not pay such tax.
 
JUSTIFICATION:
Since 1981, New York State has committed to refunding, in its entirety,
any stock transfer tax it collects under Article 12 of the Tax Law.
Nevertheless, taxpayers are still required to pay for these taxes
anytime a stock is sold or transferred within New York State. This tax
is paid through the purchasing of tax stamps or through other state
authorized procedures. This legislation eliminates the need for taxpay-
ers to pay the stock transfer tax in the first place in those circum-
stances where they would already be entitled to a 100% rebate of the
tax. For example, brokerage houses pay the tax on behalf of their
customers and then are immediately reimbursed 100% of the tax they pay.
More worrisomely, business transactions involving the transfer of stock
are sometimes held up in New York because of the technical need to pay
this meaningless tax. Moreover, the Department of Taxation must spend
money to oversee this tax collection and rebate program. Taxpayers
should not have to pay a tax and collect a rebate, and the State should
not have to issue tax stamps and collect forms for a tax where the money
goes back to the taxpayer. This bill will relieve administrative burdens
on the taxpayer and on the State. In addition, as this bill will make it
less cumbersome to transfer and sell stocks, it will help New York
State's economic health by encouraging business transactions to occur in
the State.
 
LEGISLATIVE HISTORY:
2015/2016: A. 213 (Buchwald) - Referred to Ways and Means
2014: A.8577 (Buchwald) - Referred to Ways and Means
 
FISCAL IMPACT:
None, except to the extent that taxpayers have been deciding that it is
too costly to bother to claim their 100% rebates.
 
IMPACT ON REGULATION OF BUSINESS AND INDIVIDUALS:
Eliminates costs to businesses and individuals which are complying with
a tax law that is not designed to raise any money for the State.
 
EFFECT ON FINES, TERMS OF IMPRISONMENT OR OTHER PENAL SANCTIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
190
2017-2018 Regular Sessions
IN ASSEMBLY(Prefiled)
January 4, 2017
___________
Introduced by M. of A. BUCHWALD -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, in relation to authorizing certain taxpay-
ers who are entitled to a one hundred percent rebate of certain stock
transfer taxes not to pay such taxes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new section 281-b to
2 read as follows:
3 § 281-b. Application of article to certain taxpayers. Notwithstanding
4 any other provision of law to the contrary, a taxpayer that would be
5 entitled to receive a rebate of one hundred percent of the tax imposed
6 by this article shall not be obligated to pay such taxes.
7 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01585-01-7