Committee advances scaled proposal to tax large holders of publicly traded financial assets

The Senate Ways & Means Committee on April 18 forwarded substitute Senate Bill 5,797, a bill to impose a state tax on certain financial intangible assets (publicly traded stock, publicly traded bonds, mutual funds, exchange‑traded funds) owned by taxpayers with at least $50 million in taxable financial intangible assets.

Committee staff briefed an original revenue estimate of roughly $12.2 billion over a four‑year outlook and an expenditure impact, but a proposed substitute by Senator Frame substantially reduced the rate and adjusted exemptions and revenue distribution. The substitute reduced the tax rate and exempted the first $50,000,000 of financial intangible assets, and redirected revenues to the Education Legacy Trust Account instead of the general fund; staff said the revised proposal would generate about $100 million per year beginning in 2027.

One amendment removed a clause declaring the act necessary for state support; that amendment was adopted. Some members raised implementation and administrative cost concerns; staff presented an estimated $54 million in expenditures across the outlook period in early briefing.

Outcome: The committee adopted a proposed substitute and recommended substitute Senate Bill 5,797 for a due‑pass recommendation to the rules committee.

Why it matters: The bill targets a narrow population of very large holders of publicly traded financial assets and would create a new source of revenue under the state’s tax code, channeled under the substitute to the Education Legacy Trust Account.

What happens next: The bill will proceed to the rules committee for signatures and any further floor consideration; staff and members signaled continued review of administrative costs and exemption thresholds.