Tax Alert: New York State Legislature Imposes Metropolitan Commuter Transportation Mobility Tax
8/11/2009
To help bail out the Metropolitan Transportation Authority (MTA), the New York State legislature imposed a new tax, the Metropolitan Commuter Transportation Mobility Tax, or MCTMT, earlier this year, with the new revenue stream to be distributed to the MTA. The MCTMT is imposed on employers and self-employed individuals engaging in business within the Metropolitan Commuter Transportation District (MCTD), which is comprised of the five boroughs of New York City and the counties of Nassau, Suffolk, Rockland, Westchester, Orange, Putnam, and Dutchess.
Any employer, whether tax exempt or not, with wages in excess of $2,500 in any calendar quarter for services allocable to the MCTD is subject to the MCTMT at a rate of 0.34 percent (.0034) of the payroll expense. The entire tax is borne by the employer. The employer must report and pay the tax for each calendar quarter by the last day of the month following the end of the quarter. However, for 2009 the initial MCTMT report and payment covering the period March 1, 2009 – September 30, 2009 is due November 2, 2009.
In addition to employers, individuals, including partners in partnerships and members of limited liability companies, who have net earnings from self-employment allocated to the MCTD in excess of $10,000 are subject to the MCTD, also at a rate of .34 percent (.0034). Individuals who will owe MCTMT are required to make estimated tax payments due on April 30, July 31, October 31, and January 31 of the following year. The estimated MCTMT payments cannot be combined with estimated New York State personal income tax payments required to be made by a taxpayer. For 2009, an individual’s initial estimated payment for the period March 1, 2009 – September 30, 2009 (covering 75 percent of 10/12th of the tax liability) is due November 2, 2009. A MCTMT reconciliation return will be due by April 30 of the following year.
As an alternative to each partner in a partnership making estimated tax payments and filing their own reconciliation returns, a partnership that meets certain conditions may file one group reconciliation return on behalf of all participating partners (resident and nonresident) and make group estimated tax payments. For 2009, a partnership must request permission to file on a group basis by September 15, 2009. For subsequent years, permission must be requested by March 15 of the tax year.
The New York State Department of Taxation & Finance is in the process of creating several new forms in connection with the MTCMT. More information regarding the MCTMT can be obtained from the New York State Department of Taxation & Finance's web site, located at nystax.gov.
For more information about the MCTMT and other tax issues, please contact Ernest Barbaris, a J.H. Cohn partner and director of the Firm's State and Local Tax Group, at 877-704-3500, or your J.H. Cohn service professional.
Ernest Barbaris, CPA, MST, is a J.H. Cohn LLP tax partner and director of the Firm's State and Local Tax Group, where he specializes in corporate taxes. His specialization extends into areas of Federal state, and local income taxes; FASB 109 and FIN 48 analyses; tax planning; tax audit defense; settlements; nexus studies; and sales and use tax consulting. He can be reached via email or at 877-704-3500.
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