Mahwah: NYSE Tests Alternate Data Center Ahead Of Transaction Tax

MAHWAH, NJ — The New York Stock Exchange, along with other U.S. exchanges, completed connectivity and full exchange functionality tests on Sept. 26.

Generally, this test would be run as general assurance that, if something were to happen at the main data centers — like the NYSE's in Mahwah — these back up sites could stand up to the workload.

But this test was done as a show of what's possible.

In September, the Wall Street Journal reported that these tests were part of an initiative to show New Jersey lawmakers that these exchanges, including the NYSE, don't need to operate in New Jersey.

This could impact Mahwah, the New York Stock Exchange operates a data center hub on MacArthur Boulevard, where shares are exchanged at a whiplash pace daily.

So why are the exchanges threatening to leave? A proposed New Jersey Financial Transaction Tax.

According to the bill, proposed by Assemblyman John F. McKeon, a tax would be imposed on "high quantity processors of financial transactions at $0.0025 per transaction."

This tax, of course, was not well-received by the exchanges, which have since formed the Coalition to Prevent the Taxing of Retirement Savings.

"The tests are a first step toward demonstrating industry preparedness to move data centers out of New Jersey and protect millions of market participants across the U.S. from New Jersey’s invasive proposed tax," the coalition said in a statement.

Conducted in Chicago, the coalition said another round of tests are scheduled for Oct. 24.

After this, the coalition said, its members would likely to ready to move out of New Jersey.

"Simply put, imposing the tax would force the Coalition’s members to relocate, and would be an unfortunate public signal that New Jersey is not open for business," they said.

Not every New Jersey politician is a fan of the idea, as District 40 Assemblyman Kevin J. Rooney said the proposed bill is "just another example of increasing taxes on businesses and our residents [having] real consequences driving good paying jobs out of New Jersey."

Rooney is the former mayor of Wyckoff.

Gov. Phil Murphy addressed the possibility of the exchanges leaving New Jersey during a Sept. 11 news conference, saying he liked the idea of the bill conceptually, but didn't think it would be a "forever thing," citing the unprecedented economic times brought on by the coronavirus pandemic.