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New York's Metropolitan Commuter Transportation Mobility Tax Upheld

GARDEN CITY, NY, January, 21, 2014 -- On January 14, 2014, the New York Court of Appeals, the state's highest court, declined to hear a challenge to the Metropolitan Commuter Mobility Tax (MCMT), the payroll tax levied in counties served by the Metropolitan Transit Authority. The decision permits the continuance of the tax, which was enacted in 2009, and helps fund the region's mass transportation. The tax is imposed on certain employers, self-employed individuals and partners in a partnership conducting business within the Metropolitan Commuter Transportation District, including the counties of Nassau, Suffolk, Duchess, Orange, Putnam, Rockland, Westchester, and the boroughs of New York City.

Local county executives had fought to reverse this tax declaring it an undue burden on local businesses, especially those whose employees never use MTA services such as railroads, subways and buses. The MTA said that the fees are necessary to reduce costs. The tax imposes a tax of up to 34 cents tax for every $100 of payroll for large companies with an annual payroll more than $1.25 million and on self-employed individuals and partners.

This tax was first challenged in August 2012 when the New York State Supreme Court found the tax unconstitutional. New York State immediately appealed the decision and in June 2013 the New York Appellate Court reversed the Supreme Court finding the tax to be constitutional. The final appeal to the Court of Appeals and their decision to not hear the case, essentially leaves the tax as a valid tax and good law. All taxpayers and employers must continue to comply with the law as it is in full force and effect.

The State had previously implemented an appeal process to handle protective refund claims that were anticipated as uncertainty about this tax continued during the appeals process. All of these claims are now null and void.

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