MTA Protective Refund Claims
On August 22, 2012, the New York State (NYS) Supreme Court granted the plaintiffs' motion for summary judgment and held the Metropolitan Commuter Transportation Mobility Tax (MCTMT) to be unconstitutional under the NYS Constitution.
The MCTMT went into effect on March 1, 2009 for employers and self-employed individuals engaging in business in the Metropolitan Commuter Transportation District (MCTD), which includes among others, Westchester, Nassau and Suffolk Counties and the five boroughs of New York City. These Counties, among others, are the plaintiffs in this case. For public school districts within the MCTD, the MCTMT became effective on September 1. 2009.
Although this ruling has been issued at the lowest level court in NYS, it is likely that it will be appealed by the defendants, the Governor, Assembly Speaker and Senate President, to the NYS Supreme Court, Appellate Division and then ultimately to the NYS Court of Appeals, since a State Constitutional issue is involved.
If you, as an employer, have been filing and paying the MCTMT since March 1, 2009, we recommend that you file a protective refund claim before the expiration of the three-year statute of limitations. The MCTMT is paid by employers quarterly on form MTA-305 which is due the last day of the month following the quarter-ended. An amended MCTMT return must be filed within three years of the date the original return was filed or within two year of the date the tax was paid, whichever is later. Since the first return was due November 2, 2009, the deadline to file amended "protective" zero return for all MCTMT taxes remitted is November 2nd, 2012.
For self-employed individuals that paid the MCTMT, the 2009 original return, form MTA-6, was due April 15, 2010. For self-employed individuals that were included in the composite return filed by the partnership, LLC or LLP on form MTA-505, the amended composite return should be filed by such entity. A self-employed individual includes a partner in a partnership and a member of a limited liability company ("LLC"), treated as a partnership. The first amended "protective" return for self-employed individuals is due April 15th, 2013.
We are currently waiting for guidance from NYS on the procedure that should be followed in filing the amended returns. The State has said that guidance will be issued in the next few weeks. If you use a payroll service, you should contact your service to determinate what action they may be planning to facilitate the filing of the amended returns.
In addition our tax professionals will be available to help employers file their protective refund claims. If you would like AVZ is to prepare the amended returns, we will require copies of your original MCTMT returns to be delivered to us no later than October 15, 2012. This date will allow us adequate time to prepare the amended returns for filing prior to the November 2nd deadline.
For self-employed individuals and partnerships, we will be contacting you in November 2012 to determine if you would like AVZ to prepare your protective refund claim which will be due on or before April 15, 2013.
If you have questions about the MCTMT or any state or local tax matter, please contact Timothy McMaugh, CPA, Tax Manager at AVZ (631) 434-9500.
