A proposed tax bill in New Jersey reportedly has stock exchanges reconsidering the location of data centers in the Garden State.
What Happened: Texas Gov. Greg Abbott is courting the Nasdaq NDAQ to move its data centers to Texas, he said in a tweet Wednesday.
I've been talking with the Nasdaq stock exchange about moving some of their operations to Texas.— Greg Abbott (@GregAbbott_TX) October 7, 2020
They want to flee high taxes.
I let them know that we just passed a constitutional amendment banning an income tax in Texas.@Nasdaq https://t.co/04y28dnhAZ
The move comes as New Jersey Gov. Phil Murphy has voiced support for a bill that would place an $0.0025-cent-per-transaction tax on firms electronically processing 10,000 or more financial transactions annually in New Jersey.
The plan would raise an estimated $10 billion in tax revenue for the state, which has been hurt by the effects of the coronavirus pandemic.
Nasdaq did not respond to a request for comment on this story from Benzinga.
Why It’s Important: The Nasdaq OMX Data Center in New Jersey is “one of the largest U.S. trading hubs in the world, hosting both equities and options markets and providing access to major industry market data feeds and multiple telecommunications providers,” according to Data Center Knowledge.
Stock exchanges including the New York Stock Exchange, owned by Intercontinental Exchange ICE, have pushed back on the New Jersey tax plan and threatened to move operations.
Abbott highlighted the absence of income taxes in Texas, which could lure other companies to move operations there. The city of Fort Worth previously landed a $1-billion investment from Facebook FB for a data center.
The Dallas Morning News reported that Texas is one of several states that have pursued the Nasdaq, citing unnamed sources who say Nasdaq execs are planning to visit Texas to meet with Abbott.
Benzinga’s Take: A move by the Nasdaq could have a ripple effect, bringing additional exchanges, data centers or businesses to the state. This in turn could boost the economy of Texas and home prices in certain regions.
NDAQ Price Action: Shares of Nasdaq are trading flat at $123. Shares are up 15% in 2020.
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