MCTMT Declared Unconstitutional

A Nassau County Supreme Court decision found the Metropolitan Commuter Transportation Tax (MCTMT) to be unconstitutional on August 22, 2012.

MCTMT Found Unconstitutional

As many of you may now know, on August 22, 2012 the Nassau County Supreme Court found the MCTMT to be unconstitutional. This ruling prompted the New York State Senate to introduce bill SO7516, which is intended to phase out the MCTMT.

Supreme Court Decision Is Being Appealed

According to the latest update from the New York Office of Processing and Taxpayer Services, the court ruling on the appeal case may not occur until Spring 2013, at the earliest.

Refunds May Be Available

If the decision of the supreme court is affirmed through the appeals process, there may be an opportunity to obtain refunds.

MCTMT is Still in Effect

Until a conclusion is reached, taxpayers should continue to pay and file returns. Payroll Dynamics will notify you of any changes to this tax.

Protective Claim

Although appeals are ongoing, it is important to preserve your ability to request a refund, if refunds become available. New York State has indicated that in order to protect your right to request a refund, you must file a protective claim with the New York Department of Taxation before the three (3) year statute of limitations expires on November 2, 2012.

Payroll Dynamics Will Automatically File A Protective Claim For Any Active Accounts You Have With Us.

If you do not wish for Payroll Dynamics to submit this claim, please email us at support@payrolldynamics.com. We will email an opt-out form to an authorized representative from your company.

Please note, protective claims will be filed for active companies on file as of October 26, 2012. If you had a company code that was previously active with Payroll Dynamics you must contact us to request that the protective claim be filed for that entity.

We must have your opt-out request by October 26, 2012 or a protective claim will be filed on your behalf.

We value your business relationship and thank you for the confidence you place in us. Please contact your account manager with any questions regarding this process.

What is the Metropolitan Commuter Transportation Mobility Tax?

Beginning March 1, 2009 the metropolitan commuter transportation mobility tax (MCTMT) was imposed on certain employers and self-employed individuals engaging in business within the metropolitan commuter transportation district (MCTD). The MCTD includes the counties of New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester.  

As of April 1, 2012, NY State has provided new legislation to assist small employers in their MCTMT tax obligations, requiring this tax only from employers whose payroll expense exceeds $312,500 in any calendar quarter.

Important Links:

NY Department of Taxation – Metropolitan Commuter Transportation Mobility Tax

Legislative Amendments to the Metropolitan Commuter Transportation Mobility Tax

Publication 420 – Guide to The Metropolitan Commuter Transportation Mobility Tax

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