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New York: Metropolitan Commuter Tax Ruled Constitutional in Latest Court Ruling


7/8/13

Synopsis:
 
In 2009, New York enacted the Metropolitan Commuter Transportation Mobility Tax (MCTMT) which is essentially a payroll tax on employers and self-employed individuals doing business within the metropolitan commuter transportation district. In August 2012, a New York State Supreme Court held that the MCTMT was unconstitutional. On June 26, 2013, New York’s intermediate appeals court reversed that ruling.
 
Issue:
 
Enacted in 2009, the MCTMT is imposed on employers and self-employed individuals in the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester at a .0034 percent rate. In August of 2012, a New York State Supreme Court judge ruled that the MCTMT was unconstitutional.
 
Click here to read CohnReznick’s alert describing this ruling and the steps taxpayers should take while the litigation is ongoing.
 
The Metropolitan Transit Authority (MTA) appealed the decision to the New York State Appellate Division, New York’s intermediate appeals court. On June 26, the Appellate Division overturned the Supreme Court’s ruling, finding the MCTMT to be constitutional. Nassau County has announced in news reports that it plans to appeal this decision to the New York State Court of Appeals, the state’s highest court.


What Does CohnReznick Think?
Since Nassau County will appeal the decision, it is the state’s position that, until the case is finally adjudicated, the tax process continues. Taxpayers impacted by the MCTMT must continue to remit the tax to the state until the final ruling in the case is issued.


Contact:

For more information, please contact one of the following CohnReznick tax professionals:

To learn more about CohnReznick’s state and local tax services, please visit our webpage.


Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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