An Assembly committee plans to discuss a major and controversial bill next week that would impose a tax on electronic stock trades processed in New Jersey, potentially generating billions of dollars in revenue for the state.
Monday’s hearing by the Assembly Financial Institutions and Insurance Committee comes as several stock exchanges have threatened to move their data centers in North and Central Jersey out of state if the Legislature and governor move forward with the tax.
The bill, which Assembly Democratic spokesperson Kevin McArdle said the committee will discuss but not vote on, is expected to be heavily amended before any vote, and will likely include changing the tax rate on transactions and making the tax temporary.
The original bill, NJ A4402 (20R), which Assemblyman John McKeon (D-Essex) introduced in July, would impose a quarter-cent tax on every financial transaction processed in New Jersey.
Democrats have hired Paul Hastings LLP, a Washington, D.C.-based law firm with expertise on the topic, to help design the proposal. An invoice from the firm shows it’s charged Senate Democrats $30,000 so far.
Background: New Jersey’s economic slowdown from the coronavirus pandemic has cratered some revenue sources, resulting in the state agreeing to borrow billions to fund the current budget.
Financial transaction taxes are nothing new, but the idea to apply them to New Jersey’s vast server farms was first proposed by the late congressional candidate David Applefield in an op-ed earlier this year. McKeon, who read the op-ed, introduced the bill the day after Applefield died.
The bill has since gained traction, with Gov. Phil Murphy and legislative leaders all indicating support for taxing electronic trades.
Impact: Monday’s hearing is the latest indication Democrats are serious about the