In 2009, New York enacted the Metropolitan Commuter Transportation Mobility Tax (“MTA payroll tax”) in response to a large MTA budget shortfall. The MTA payroll tax is a quarterly tax on certain employers and self-employed individuals engaging in business within New York’s metropolitan commuter transportation district (MCTD), which includes New York (Manhattan), Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island), Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess and Westchester counties.

In our January 2013 newsletter (Vol. 8, No. 1), we reported that a New York State Supreme Court justice declared the MTA payroll tax unconstitutional. However, the New York Supreme Court, Appellate Division, has since reversed this finding, holding the MTA payroll tax constitutional because it serves the substantial state interest of providing a “funding source for the preservation, operation, and improvement of essential transit and transportation services in the MCTD.”