New York Senate Drops Tax Hike Plan for Startup Investment Gains

March 26, 2026, 9:36 PM UTC

The New York Senate is pulling a proposal to raise an estimated $101 million by hiking taxes on startup investment gains after it faced intense pushback from the tech industry.

The Senate had proposed decoupling the state tax code from the federal expansion of a Qualified Small Business Stock exclusion in its March 10 budget resolution. That plan is “being dropped” as negotiations continue ahead of the state’s April 1 budget deadline, Mike Murphy, a spokesperson for the state Senate’s Democratic majority, said in a Thursday email to Bloomberg Tax.

The tax break allows founders and early investors to avoid ...

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