(Bloomberg) -- New Jersey lawmakers seeking to tax high-speed trading scaled back the proposed fee in a bid to overcome opposition from financial firms that have threatened to move operations out of state.
A revised draft of the bill obtained by Bloomberg would impose a temporary tax of a hundredth-cent per trade, down from an earlier bid to levy a quarter-cent tax. The fee would be paid by “high-quantity processors of financial securities,” meaning firms that collect and store data. And under the new plan, the tax would end after two years.
A legislative committee is set to discuss the proposal next week. Sponsors include Senate President Steve Sweeney, a Democrat who is New Jersey's highest-ranking state lawmaker.
Read more: Finance Sharpens Its Attack Against New Jersey's Tax on Trading
The New York Stock Exchange, Nasdaq Inc. and Cboe Global Markets Inc. have opposed the tax idea, threatening to close their New Jersey data centers and relocate an electronic infrastructure that underpins the world's biggest and most active stock markets. Governor Phil Murphy sees the tax on stocks, options, futures and swaps trading as a way to help shore up the state's fiscal health and expand his social-justice agenda.
The new tax plan would apply only to instruments subject to fees under the Securities Exchange Act of 1934. If the tax is already paid to another state, New Jersey would adjust or cancel the amount due.
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