Relates to imposing a tax of one-half of one percent on all corporate stock buybacks of issued shares.
Summary
S01681 would amend New York’s tax law to create a specific tax on corporate stock buybacks. Under the bill, when a corporation purchases, redeems, or otherwise reacquires its own issued shares, the transaction would be taxed at one-half of one percent of the value paid for those shares. The bill also revises existing stock transfer tax language to make clear that corporate reacquisitions are taxable regardless of whether the shares are later cancelled immediately or within one year through corporate action.
The measure is aimed at corporate share repurchases rather than ordinary market sales of stock. It would preserve the broader stock transfer tax framework already in state law, but add a distinct rate and rule for buybacks, which are often used by companies to return capital to shareholders or boost share prices. The bill takes effect immediately if enacted.
Impact
The bill would amend section 270 of the Tax Law, altering how New York taxes certain stock transactions. It would add a new subdivision imposing a 0.5% tax on the value of corporate share repurchases, redemptions, and reacquisitions of a corporation’s own shares, while also clarifying that these transactions remain taxable even if the shares are cancelled later under the Business Corporation Law or by board action. The practical effect would be to increase tax liability for corporations engaging in buybacks and to expand the state’s ability to collect revenue from those transactions.
Sentiment
There is no recorded committee transcript or vote history in the provided materials, so no formal debate or roll-call sentiment is available. Based on the bill’s caption and structure, the measure appears to reflect a policy preference for taxing corporate stock buybacks as a revenue-raising and potentially anti-buyback measure. The available context does not show any amendments, opposition statements, or recorded support.
Contention
The main point of contention likely concerns whether taxing stock buybacks is an appropriate way to raise revenue and influence corporate behavior. Supporters would likely view the tax as a way to capture revenue from large corporations and discourage excessive repurchases, while opponents may argue it could penalize legitimate capital management decisions, reduce competitiveness, or be passed on to investors and workers. Because no committee discussion or votes are provided, the specific positions of legislators, business groups, or advocates are not documented in the record supplied here.
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