New York’s Highest Court Allows Metropolitan Commuter Transportation Mobility Tax To Stand

It appears the legal battle to invalidate the Metropolitan Commuter Transportation Mobility Tax (MCTMT) is finally over. On January 14, the New York Court of Appeals declined to review last year’s appellate court decision that upheld the MCTMT as a valid and constitutional tax. Click here for a link to the decision.

The MCTMT was enacted in 2009 and imposes a tax of between .11 percent and .34 percent of quarterly payroll expense on employers located within the Metropolitan Commuter Transportation District (the five boroughs of New York City and seven surrounding counties) whose quarterly payroll exceeds $312,500, and .34 percent of compensation received by self-employed individuals earning $50,000 or more in the district. In 2012, a local supreme court struck down the tax on the basis that the enabling law was unconstitutionally passed without either a home rule message or a two-thirds voting majority. We reported on that ruling here.

Following that ruling, the New York State Tax Department was flooded with refund claims for MCTMT taxes paid. But in June 2013, an intermediate appeals court reversed the lower court’s decision. Here is a link to our story on that ruling.

With the court of appeals’ decision to let the case stand, the litigation has ended, and it effectively renders moot all protective refund claims filed during the litigation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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