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Metropolitan Transportation Commuter Mobility Tax

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Insight into NY Metropolitan Transportation Commuter Mobility Tax

Philadelphia, PA - The Metropolitan Transportation Commuter Mobility Tax is a tariff that is meant to provide revenue for the MTA by taxing businesses in the New York City region. It requires employers to set aside 34 cents for every $100 in payroll costs and is projected to generate $1.26 billion of revenue in 2012. On August 22, a New York Supreme Court Judge ruled that the tax was improperly enacted into law in 2009, and thus unconstitutional.  In the state of New York, the Supreme Court is actually the trial court, not the court of final decree. 

Suburban government officials and business owners opposed the tax and filed the lawsuit. The judge ruled that the tax did not “serve a substantial state interest” and therefore violated the State Constitution. However, it should be noted that this ruling goes against rulings in other judicial venues by similarly situated plaintiffs asserting similar arguments. The New York State Department of Taxation and Finance has stated that this litigation has not concluded and the tax is still in effect. This means that they are appealing the decision. The next step is for an appellate court and then potentially the Court of Appeals to review the decision. 

If the tax is ultimately declared unconstitutional, taxpayers are permitted to seek a refund. Generally a claim for refund must be filed within three years of when you filed the tax return. Payment of the MCTMT first commenced in November 2009, so at present, the first claim for refund must be made by November 2, 2012. This would be a protective claim, since it is based on an unresolved issue.  It is filed for the purposes of preserving the claim against being time barred pending resolution of the final issue. Should a higher court resolve the issue in a way that would permit the taxpayer to get a refund, the protective claim would extend that right for the refund after the normal time period allowed to file a refund has expired. 

The protective claim can be filed through the Online Services account, by calling 518-485-2392, or through an electronic form available here http://www.tax.ny.gov/bus/mctmt/mctmt_legal_proceedings.htm

It should be noted that once a protective claim is filed for the MCTMT, it covers all prior and future filings of the MCTMT.

If you have been affected by Hurricane Sandy you will have until November 14, 2012 to file your protective claim for refund of the MCTMT.  Please review the New York State Department of Taxation and Finance Notice N-12-11 for additional information on this extension. 

If you have any questions or concerns regarding MCTMT or how to file a protective claim for refund, please do not hesitate to reach out to Stacy Cullen, Director of Nonprofit Tax Services.

 

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