The metropolitan commuter transportation mobility tax (MCTMT) is a tax 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.
On August 22, 2012, a New York State Supreme Court decision found the MCTMT to be unconstitutional. Since the Supreme Court is the lowest court in the state this litigation is not yet concluded and will likely go to appeals. Therefore, New York State is advising taxpayers who have been paying this tax to continue to pay and file returns. If this requirement changes, the state will notify taxpayers.
In the meantime, since this matter will most likely not be resolved in the near future, taxpayers who have paid significant amounts of MCTMT tax in 2009 and later periods may opt to file protective refund claims for the tax paid. Generally, a protective claim is a formal claim or amended return for credit or refund normally based on current litigation or expected changes in tax law or other legislation. You file a protective claim when your right to a refund is contingent on future events and may not be determinable until after the statute of limitations expires.
The state imposes a three year statute of limitations for filing refund claims. For business entities who file quarterly MTA tax returns, the initial return was due November 2, 2009. Therefore, protective claims must be filed on or before the three year expiration date, or November 1, 2012. Self-employed individuals and partners filing Form MTA-6 have a little more time. The initial annual return was due April 30, 2010, with an extended due date of November 1, 2010, so refund claims for self-employed and partners must be filed timely during 2013. Additional protective claims may need to be filed as time passes to avoid potential refunds from falling outside the statutory three year period.
Please contact your C&L tax professional for more information, or if you feel this applies to you. |