EXECUTIVE ORDER NO. XX
STATE OF NEW YORK
OFFICE OF THE GOVERNOR

EXECUTIVE ORDER ON THE TEMPORARY RESTRUCTURING OF FEDERAL TAX COLLECTION IN THE STATE OF NEW YORK

WHEREAS, the State of New York is a primary economic engine of the United States, contributing significant tax revenue to the federal government; and

WHEREAS, recent actions by the federal government, including but not limited to the directives outlined in the the proposed White House’s budget freeze order publically reported, have unilaterally and without constitutional authority risk halting critical federal funding to the states; and

WHEREAS, such actions violate the fundamental principles of the U.S. Constitution, including the separation of powers, the Tenth Amendment, and the Spending Clause (Article I, Section 8), which grant Congress—not the Executive Branch—authority over federal spending; and

WHEREAS, the arbitrary withholding of duly appropriated funds constitutes an unconstitutional overreach that disrupts essential services, including infrastructure, healthcare, and public safety programs upon which New York residents depend; and

WHEREAS, until such time as the legality of the federal funding freeze is adjudicated and constitutional order is restored, the State of New York must take necessary actions to safeguard its fiscal stability and ensure the continued provision of critical services; and

WHEREAS, New York State possesses the sovereign authority to act in defense of its citizens against unlawful deprivation of essential funding; and

WHEREAS, in order to prevent the economic destabilization of the State of New York, it is imperative that tax revenues generated within the State remain under the control of New York until such time as federal funding obligations are met; and

NOW, THEREFORE, I, Kathleen Hochul, Governor of the State of New York, by virtue of the authority vested in me by the Constitution and laws of the State of New York, hereby order and direct as follows:

SECTION 1: TEMPORARY COLLECTION AND ESCROW OF FEDERAL TAXES
Effective immediately, all employers and businesses operating within the State of New York shall withhold and remit all federal payroll, income, corporate, excise, self-employment, and any other federal taxes from employees and businesses to the New York State Department of Taxation and Finance, instead of the Internal Revenue Service (IRS).
These withheld funds shall be deposited into a State Treasury Federal Tax Holding Trust, to be maintained and administered by the State Comptroller, pending resolution of the federal funding dispute.

SECTION 2: PROTECTION OF NEW YORK STATE REVENUES
No funds collected from New York taxpayers shall be transferred to the federal government until:

The federal government restores full and uninterrupted funding to the State of New York.

A judicial determination is issued affirming the constitutional authority of the Executive Branch to withhold appropriated funds.

If the federal government seeks to enforce tax remittance by legal action, the State of New York shall challenge such enforcement as unconstitutional under the Tenth Amendment and the Spending Clause.

SECTION 3: LEGAL CHALLENGE AND STATE ACTION
The New York Attorney General is directed to immediately file suit in federal court challenging the legality of the Executive Branch’s funding freeze as an unconstitutional violation of the separation of powers.
The State Comptroller, in consultation with the Attorney General, shall develop emergency financial protocols to ensure the continued functioning of all state services impacted by the funding freeze.
State agencies shall prioritize the use of temporarily withheld federal tax funds to backfill essential services, ensuring uninterrupted government operations in New York State.

SECTION 4: ENFORCEMENT AND COMPLIANCE
Employers and financial institutions in the State of New York are required to comply with this order and shall not transmit federal tax withholdings to the IRS until further notice.
The Department of Taxation and Finance shall establish a secure electronic filing system to collect and manage these funds efficiently.
Any attempts by federal agencies to penalize New York employers or residents for compliance with this Executive Order shall be met with legal action by the State of New York.

SECTION 5: EFFECTIVE DATE AND DURATION
This Executive Order shall take effect immediately upon issuance and shall remain in force until:

Federal funding to the State of New York is fully restored; or
A federal court rules on the constitutionality of the Executive Branch’s actions regarding funding freezes.

This Order shall be reviewed every 30 days for necessity and effectiveness.

IN WITNESS WHEREOF, I have hereunto set my hand and caused the Seal of the State of New York to be affixed this [date].

Governor Kathleen Hochul
Governor of the State of New York