On August 22, 2012, a State Supreme Court judge declared the MTA payroll tax unconstitutional. If this ruling stands, taxpayers will be able to claim refunds from NYS for the entire MTA payroll tax paid. Taxpayers should not rush to spend their refunds yet as the MTA is expecting to appeal the decision. It may take months or possibly years before a final decision is made. For those taxpayers that want to protect their refunds, they should consider filing protective refund claims with the State prior to expiration of the statute of limitations.
The MTA payroll tax, which forced all businesses, municipalities and school districts to pay $0.34 for every $100 of employers’ payroll in the 12-county MTA region, was passed in 2009. The tax was passed to fill a deficit gap in the MTA Budget.
Further, until this decision is final, we are recommending the business to continue to pay and remit the MTA tax to the state.