Imposes tax on high-quantity processors of financial transactions at $0.0025 per transaction.

2026-2027 Regular Session Introduced by John McKeon

New Jersey would tax high-quantity financial transaction processors at 0.0025 per transaction for those handling 10,000+ transactions annually, starting 90 days after enactment.

Introduced in the Senate, Referred to Senate Commerce Committee

Purpose and Intent

The bill seeks to raise state revenue by imposing a new tax on entities that process a high volume of financial transactions within New Jersey.

It targets “high-quantity processors” that handle 10,000 or more financial transactions through electronic infrastructure located in the state during a calendar year.

The tax is intended to apply starting 90 days after enactment.

Key Provisions

Tax base: Financial transactions processed in the State by qualifying processors.

Tax rate: $0.0025 per financial transaction.

Eligible transactions: Broadly defined to include purchases or sales of financial instruments such as stocks, futures contracts, options contracts, futures options, swaps, derivatives, and shares of stock.

Threshold: Applies to entities processing 10,000 or more financial transactions in a calendar year through electronic infrastructure located in New Jersey.

Tax incidence: The bill specifies tax per transaction; the precise interpretation (per share/contract vs per aggregate transaction) may affect the calculation, as noted in the fiscal analysis.

Effective date: 90 days after enactment.

Who Is Affected

High-quantity processors of financial transactions operating in New Jersey, including major stock exchanges and market infrastructure facilities (e.g., data centers in Mahwah, Carteret, Secaucus that service NASDAQ, Intercontinental Exchange/NYSE, and Chicago Board Options exchanges).

Potential indirect effects on financial markets, trading volumes, and liquidity if processors relocate to other jurisdictions.

State government: Increased revenue and administrative/enforcement responsibilities for the Department of the Treasury.

Fiscal Impact

Estimated State revenue: Approximately $10.6 billion to $11.4 billion annually (under static assumptions).

Rationale: Based on NASDAQ U.S. Equities Market Volume data; low end uses 4.4 trillion transactions (2025), high end uses ~2.0 trillion transactions annualized through May 2026.
Note: The estimate assumes all other factors remain equal; actual revenue could be lower if operators relocate processing to other jurisdictions or if the interpretation of “transaction” differs.

Estimated State expenditures: Indeterminate increase due to administration and enforcement needs.

Procedural and Timeline Considerations

Enactment: Tax begins 90 days after enactment.

Revenue analysis caveat: OLS caution that the static revenue estimate may be challenged if market participants relocate processing out of New Jersey or if tax incidence differs.

Legislative status: Introduced January 13, 2026; referred to Senate Commerce Committee. Co-sponsored by Sen. John McKeon.

Additional Notes

The fiscal estimate notes that the bill’s interpretation could affect how the tax is applied (per individual share/contract vs per transaction regardless of quantity within a trade).

The Office of Legislative Services prepared the fiscal analysis due to lack of an executive fiscal note, highlighting potential variability in actual economic impact.

Bill