BILL NUMBER: S1681
SPONSOR: MAY
 
TITLE OF BILL:
An act to amend the tax law, in relation to imposing a specific tax on
all corporate stock buybacks of issued shares
 
PURPOSE:
To impose a tax on corporate stock buybacks of issued shares.
 
SUMMARY OF PROVISION:
Section 1 - amends subdivisions 1 and 2 of section 270 of the tax law,
to impose a tax on the reacquisition of stock by a corporation even if
such corporation subsequently cancels such stock.
Section 270 of the tax law is amended by adding a new section 2-a, which
sets the new tax on corporate stock reacquisition at one-half of one
percent of the value paid by such corporation for the shares.
Section 2 - effective date
 
EXISTING LAW:
Current law imposes a tax on the purchase, redemption, or other acquisi-
tion by a corporation of its stock, unless such shares are cancelled
pursuant to section 515 of the Business Corporation Law.
 
JUSTIFICATION:
Following the 2017 federal corporate tax cuts, corporations in the
United States spent a record $1 trillion in 2018 in corporate stock
buybacks. In 2019, corporations spent nearly $1 trillion again buying
back the stock of their shareholders. In the same year that AT&T
announced a three-year, $30 billion stock buyback plan, the company
revealed a third quarter 2019 employment cut of 5,950 jobs, bringing the
total job cuts by the company since the 2017 tax break to 33,778 jobs.
Corporations buy back their stock to inflate its value, enriching share-
holders and executives, whose compensation is often tied to share pric-
es. Trillions of dollars have been spent on stock buy-backs instead of
productive investment that could benefit workers, the economy, and
companies' long-term sustainable growth. A tax on these transactions
could help encourage productive investment while providing needed state
revenue to invest in public education and reduce the property tax burden
on New York's working families. The Roosevelt Institute estimates that a
tax of .5% could generate as much as $3.2 billion in revenues for the
state of New York.
 
LEGISLATIVE HISTORY:
2023-2024 - S.2002 (May) / A.4877 (Kelles)
2021-2022 - S.4528 (May) / A.2422 (Niou)
2019-2020 - S.7629 (Metzger) / A.9748 (Niou)
 
FISCAL IMPLICATIONS:
New tax revenue for the state.
 
EFFECTIVE DATE:
This act shall take effect immediately.