New Jersey-2020-AR192-Introduced

An Assembly Resolution expressing sentiment that New Jersey should remain a hub for server farms operated by financial services firms.

Whereas, Although many people believe that stock trading primarily occurs in New York, New Jersey is the physical location of several stock exchange server farms, also called data centers, where billions of securities transactions are processed each day; and

Whereas, These server farms are operated by a number of important companies, including the New York Stock Exchange (NYSE), Nasdaq OMX, and the Chicago Board Options Exchange (CBOE); and

Whereas, Server farms located in towns such as Mahwah, Carteret and Secaucus now process the vast majority of all stock trading of these companies, and almost all the stock trading in the country every single day happens within the borders of New Jersey; and

Whereas, The State derives significant economic benefits from these data centers being located within its borders, including revenue from income taxes, property taxes, and business development; and

Whereas, The data centers not only support the financial industry in the State, but also local businesses such as janitorial, security, and food and restaurant services; and

Whereas, There has been discussion amongst policymakers to institute a transaction tax on all financial transactions occurring at these data centers, and this kind of tax may cause the companies operating these server farms to relocate to states that do not impose a transaction tax; and

Whereas, The purported revenue benefit of imposing the transaction tax may be overestimated, and the potential loss of revenue and benefits from the relocation of these server farms must be adequately considered; and

Whereas, The stock exchanges are engaging in testing in centers located outside of the State to prepare for a relocation of the data centers should these taxes be enacted; and

Whereas, The data server farms provide too many benefits to the State and its residents to risk losing this business by imposing yet another tax in the State that is regularly ranked last in the nation for its business climate; and

Whereas, It is fitting and proper for this House to express its sentiment that the server farms operated by financial services firms should remain in New Jersey, and the State should not impose a financial transaction tax on financial services firms; now, therefore,

Be It Resolved by the General Assembly of the State of New Jersey:

1. This House hereby expresses its sentiment to the Governor and the Legislature that for the benefit of the State and its residents, the State should encourage financial services firms to maintain operations of their data server farms in the State, and that the State should not impose a financial transaction tax on financial services firms.

2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the Governor, the Senate President, the Speaker of the General Assembly, and the majority and minority leaders of each house of the State Legislature.

STATEMENT

This Assembly Resolution expresses the sentiment that the State should encourage financial services firms to maintain operations of the data server in the State, and that the State should not impose a financial transaction tax on the financial services firms.

Although New York is commonly viewed as the center of the financial industry, the New York Stock Exchange (NYSE) and its competitor Nasdaq OMX, process billions of securities transactions each day in New Jersey. Moreover, the vast majority of stock trading by these companies is now processed in server farms located in towns such as Mahwah, Carteret and Secaucus, and almost all the stock trading in the country every single day happens within the borders of New Jersey.

The State derives significant benefits from these data centers being located within its borders, including revenue from income taxes, property taxes, and business development, and the centers support local businesses such as janitorial, security, and food and restaurant services.

There have been ongoing policy discussions about instituting a transaction tax on all stock exchanges occurring at these data centers, which may cause the companies operating these server farms to relocate to states that do not impose a transaction tax. The NYSE and other stock exchanges are engaging in testing in centers located outside of the State to prepare for a relocation of the data centers should a financial transaction tax be imposed.

The server farms provide too many benefits to the State and its residents to risk losing this business from the imposition of a financial transaction tax, so the resolution expresses the sentiment that the State should encourage the server farms operated by financial services firms to remain in New Jersey, and a financial transaction tax should not be imposed on financial services firms.