Business owners may be eligible for a refund from the money paid toward the MTA payroll tax but time is running out.
The Nassau County Supreme Court declared that the Metropolitan commuter transportation mobility tax, which is more commonly known as the MTA payroll tax, was unconstitutional on Aug. 22.
While the ruling is currently being appealed by New York State and the Metropolitan Transit Authority, business owners have the right to file a protective claim but it must be done on or before Nov. 2.
“Filing a protective claim protects your right to a refund regarding the unresolved issue, in the event the issue ultimately is resolved in a way that gives rise to a right to a refund after the normal time period allowed to file for a refund has expired,” according to the New York State Department of Taxation and Finance website.
Should the ruling of the Nassau Supreme Court be upheld, businesses that paid the tax may be eligible for a refund.
Since the first payment was made in November 2009 and the state has a three-year statute of limitations, the deadline to file a claim for a tax refund is Nov. 2.
A protective claim may be filed through the Department of Tax and Finance’s website, http://www.tax.ny.gov/bus/mctmt/mctmt_legal_proceedings.htm, or by calling 518-485-2392.
“The message is simple: get your claim in immediately so you are eligible to receive the tax dollars you never should have been made to pay in the first place,
said state Senator Greg Ball. “Since this tax was created, I have been fighting for a full repeal, and this ruling will allow us to return the MTA’s ill gotten gains on an expedited time frame. We are now urging all businesses owners to file their protective claim so they are eligible to receive a retroactive refund immediately!”
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 in the MTA budget.
Nassau County filed the suit in 2010. Subsequently other counties joined the case, including Westchester and Putnam, while Nassau County was maintained as the lead petitioner in the lawsuit.
In Dec. 2011, lawmakers passed legislation revamping the tax code and exempting about 80 percent of companies from having to pay the MTA payroll tax. Schools also became exempt. Large businesses and municipal governments were still mandated to pay the tax.
The MTA payroll tax remains on the books while the appeal is underway. “All taxpayers who have been paying this tax remain subject to the tax and are required to continue to pay the tax and file the required returns,” according to the tax and finance department website. “As with other taxes, failure to make the tax payments and file required returns could subject a taxpayer to penalties.”