Rep. Byron Donalds (R-Fla.) is urging the New York Stock Exchange (NYSE) to relocate to Florida, where he says there’s no danger that the company will be hit with a tax on stock trades.
“We have a lot of nice land here in Southwest Florida. We can find a place for them right here in the heart of my congressional district,” Donalds told NTD in a Feb. 16 interview.
Donalds’s invitation to the NYSE to move to Florida came in the context of a recent proposal floated by legislators to tax stock trades. New York lawmakers have introduced a bill to amend the law to tax transfers of stocks, bonds, and derivatives, citing the state’s budgetary shortfall. The transfer tax was first imposed in 1905 but was effectively eliminated in 1981 via rebate. It taxes stocks being traded based on the dollar value of the stock.
The Florida lawmaker called the tax proposal “outrageous,” and said he understands why NYSE executives are upset about it.
“With our current technology, securities are traded all over the world. They’re traded all over America. So if I’m trading stocks in Florida, that means they’re going to be taxed in New York,” Donalds said. “No, that’s not appropriate.”
Rep. Byron Donalds (R-Fla.) in an interview with NTD on Feb. 16, 2021. (Courtesy of NTD)
Plans to reimpose the tax prompted NYSE President Stacey Cunningham to issue a warning that the exchange might leave New York.
“The New York Stock Exchange belongs in New York,” Cunningham wrote in an op-ed in The Wall Street Journal. “If Albany lawmakers get their way, however, the center of the global financial industry may need to find a new home.”
“While New York has remained a center of gravity for the financial industry, many employees of ‘Wall Street’ firms are migrating to Florida, Texas, and other states with hospitable tax policies. New York’s leaders did the right thing in 1981 when they made the state’s stock-transfer tax dormant through a 100 [percent] rebate,” she wrote.
“If lawmakers opt to reinstate that tax, the NYSE may need to follow the lead of those relocating firms. Some of our customers are already asking about our willingness to relocate.”
Saying he hopes NYSE does decide to uproot and relocate to Florida, whose tax and regulatory environment he called a “recipe for success,” Donalds lamented the growing constraints on New York businesses.
“New York, my former home state, has gone the complete opposite direction,” he said. “That’s why business owners are fleeing.”
Donalds’s invitation comes after Florida Chief Financial Officer Jimmy Patronis wrote a letter to the NYSE president, outlining some arguments why operating the exchange in Florida would be financially prudent.
“The Exchange’s parent company, Intercontinental Exchange, Inc., could realize a significant savings on corporate income taxes since Florida’s 4.4 percent corporate income tax rate is nearly one-third lower than the New York Corporate Income Tax rate of 6.5 percent,” Patronis wrote, according to a copy of the letter obtained by WCTV.
“Crucially for The Exchange, Florida repealed its intangible tax on the market value of stocks, bonds, and other financial instruments in 2007. The tax repeal also eliminated intangible taxes on mutual funds, bonds, and more,” Patronis added.
The nonpartisan Citizens Budget Commission has recommended that New York lawmakers not revive the transaction tax and instead use other ways to close the state’s budget gap, including reducing local aid and trimming spending on some development projects.
Gov. Andrew Cuomo’s administration has signaled it may not support the bill.
Zachary Stieber contributed to this report.