The insurance industry in New Jersey faced a scare in mid-September when Senate President Steve Sweeney introduced S-2902, which would impose a tax on high-quantity processors of financial transactions at $0.0025 per transaction. The bill defines "high-quantity" as processors of 10,000 or more financial transactions through electronic infrastructure located in New Jersey during the year. There was speculation the funding mechanism would be attached to the state budget. Fortunately, the state budget was approved, and the transaction tax was not included.
“As a result, things appear to be slowing down, and we may not see action until next month at the earliest,” said Paul Bent, NAIFA-NJ lobbyist.
NAIFA remains on guard should the bill regain momentum. Presidential hopeful Joe Biden’s tax plan, along with the New Jersey financial transition tax plan, confirm that NAIFA advocacy must continue to grow its grassroots support to address such misguided proposals.
“The tax proposed in New Jersey would significantly increase the costs of executing trades in New Jersey,” said Corrado Gugliotta, NAIFA-NJ president. “In the immediate short-term, these costs would be passed on to many New Jersey residents, including middle-class pensioners. Longer-term, best execution requirements will force most securities firms to execute future trades on non-New Jersey exchanges. If enacted, the legislation is far more likely to harm New Jersey savers and investors and the state’s overall economy than to raise significant revenue.”