Stock Transfer Tax Rebate Explained
Ralph Yozzo
Maybe we should have a 100% rebate on income tax in both NYS and NYC?
The New York State Stock Transfer Tax (STT) is an interesting relic of fiscal policy. While it technically remains "on the books," it has been 100% rebated since 1981, meaning it is effectively zeroed out for almost all modern transactions.
How the Rebate Works
Under New York Tax Law § 280-a, a tax is levied on the sale or transfer of stocks, bonds, and other corporate certificates. However, the law provides for a full rebate of this tax.
The "Invisible" Tax: For most traders using a broker or exchange, the tax is paid and the rebate is applied automatically and instantaneously. You likely never see it on your trade confirmations because the net effect is $0.
Manual Claims: In rare cases—such as physical transfers of stock certificates outside of an exchange—taxpayers might technically need to buy tax stamps. These taxpayers can then file a claim with the NYS Department of Taxation and Finance to get that money back (using Form MT-656).
Current Political Context (2026)
There is significant ongoing debate regarding this rebate. Because the tax is already "active" in the law but simply rebated back, proponents of ending the rebate argue it is an untapped revenue source that could generate between $14 billion and $16 billion annually.
Legislation: Several bills (like A1494 in the 2025–2026 session) have been introduced to repeal the rebate. The goal of these bills is to keep the tax revenue to fund the MTA, NYCHA, and other infrastructure projects.
Opposition: Critics and Wall Street advocates argue that ending the rebate would cause high-frequency trading firms to relocate their servers or operations to other states to avoid the fee.
Comparison: Real Estate Transfer Tax
It is worth noting that this is distinct from the Real Estate Transfer Tax (RETT) or the NYC Real Property Transfer Tax (RPTT).
Unlike the Stock Transfer Tax, real estate transfer taxes are very much active, not rebated, and represent a significant closing cost for property sales in New York City.
Yoel Friedman
I hope you are doing well.
You make a fair point regarding the distinction between these taxes. The Real Estate Transfer Tax (RETT) and the NYC Real Property Transfer Tax (RPTT) are costs that the state can effectively enforce because they are tied to physical property that cannot be relocated.
However, regarding other taxes—including the proposed changes to the Stock Transfer Tax—if the financial burden becomes too high, taxpayers maintain the option to establish Florida as their primary residence to avoid these additional costs. When the tax environment is no longer competitive, mobility becomes a significant factor for many individuals and firms.
Best regards,
Yoel Friedman
--
You received this message because you are subscribed to the Google Groups "Taxpayers of New York Political Club for seniors and all ages" group.
To unsubscribe from this group and stop receiving emails from it, send an email to tax-payers-of-new...@googlegroups.com.
To view this discussion visit https://groups.google.com/d/msgid/tax-payers-of-new-york/CAJy-wZbFa1MBfZ%2BQV2eKecgR3xsROC1BDM7m8T-aRNo7pH7%2BZw%40mail.gmail.com.
