I don't live in NYC...and you are confusing 2 things. Yes, you pay tax when you sell...you don't pay capital gains as the stock gains or loses value. Agree with you on that...but you do pay tax when you are first awarded or gifted the stocks. Your stocks teacher in college is correct...but your stocks teacher didn't cover the scenario of getting a stock award. Most people don't get stocks awarded to them, so it's not a common issue covered.