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MTA Payroll Tax Ruled Unconstitutional

The tax imposed in 2009 was never passed legally, according to a State Supreme Court judge.

In a move that will likely come as a relief to many local small business owners — and school districts and municipalities, among others — a judge ruled New York State's MTA Payroll Tax unconstitutional on Wednesday.

According to Reuters, a State Supreme Court judge in Nassau County said in his ruling that because the law applies to only 12 counties in the state — and neither home rule messages nor two-thirds votes in the State Legislature were obtained — the legislation was passed illegally.

The MTA reportedly plans on appealing the ruling.

The ruling will reportedly put the MTA out about $1.5 billion per year, while that cash will remain in the pockets of businesses, municipalities, and taxing districts, many of which called the tax unnecessary, especially

"I'll bet if I polled my customers I'd be lucky to find one who gets out here using the train," Mike Acebo, the general manager at in Greenport, said at the end of 2011. "I never had anybody explain how that tax helped my business in any way, shape or form."

When adopted in 2009, the tax imposed a 34-cent tax for every $100 of payroll.

After considerable outrage throughout the first couple of years of the tax, the MTA rolled it back at the end of 2011, eliminating it entirely for businesses with an annual payroll under $1.25 million. The , though the measure never got the required support from the Assembly.

According to the office of Suffolk County Executive Steve Bellone, the ruling could save taxpayers $3.5 million per year.

Said Bellone in a statement: “This initial ruling is a big victory for Suffolk County taxpayers, many of whom get little to no service from the MTA. Since 2009, Suffolk County has paid an estimated $12.5 million as a result of the MTA payroll tax and local businesses have paid tens of millions more."

Click here to read the Reuters story.

Jerry Can August 23, 2012 at 04:55 AM
This tax stank worse than rotten fish from its beginning. What stinks more is that the MTA has taxing authority..Time to abolish it and sell it to private investors.
Argile August 23, 2012 at 07:41 AM
So does this mean we'll get the scumbag MTA tax off of our property tax bill?
Operation mta revenge August 23, 2012 at 09:38 AM
This is a shining example of the criminal element of unions and their willing accplice tim bishop and ny state officials. We have been robbed and our money illegally confiscatef for 3 + years sanctioned by your state government. It is aebil state of affairs folks. We need to call the police en masse and report a robbery. Please. If we can get 5000 calls to licsl ny state police department including southampton we can cause some anarchy and call attention to what has transpired here. This is nothing short of a coordinated payola to the mta funded by you and I. How much abuse are you going to stand!? Tim bishop did nothing to protect us he simply took the money from this so called tax as a huge contribution from the mta union! This was ny states largest money laundering scam in history. Now what are we going to do about it. I hope your answer isnt "nuthin'" this means war
Argile August 23, 2012 at 10:11 AM
Wasn't that blind liberal Paterson the reason for the MTA finding it's way on our bills in the first place?
Enuf August 23, 2012 at 10:17 AM
Are you suggesting a second string blind bench warmer instituted this over Bishop's stern warnings that this was not on the up and up? You wouldn't for a second be insinuating that the blind bench warming criminal wasn't working in cahoots with the bearded provost to ensure that a new tax was created in order to flood with mta with new taxpayer remitted cash so they could turn around and give it back to him right? Yeah, that never happens. C'mon man, this is real, not Candy Land.
drd August 23, 2012 at 12:45 PM
how does Tim Bishop, a congressional representative to united States House of Representatives have anything to do with a state law? The closing of successful car dealerships because of the GM take over might be a better pro union issue I would like to see addressed by Mister bishop.
C Law August 23, 2012 at 12:53 PM
Where do we apply to get our refunds?
Mary August 23, 2012 at 01:09 PM
It was a sneaky and outrageous tax to begin with. And if Obama is elected get ready for more of this come January. This is only the tip of the iceberg. As a small business owner, and will children in school, I think it is disgusting that the MTA was trying to siphon off hard working Americans because it can't balance it's bills. Live within your means governenment, businesses, people!
PJ Delia August 23, 2012 at 05:50 PM
about Freakin time. Now, to eliminate the tax on the unemployment tax.
Jonathan Baker August 24, 2012 at 01:43 AM
The tax is illegal. So, the illegally obtained funds must be returned to those who had to pay the illegal tax. I mean, the MTA can't keep illegally obtained monies, can they??? Give it back - NOW!
Argile August 24, 2012 at 02:18 AM
Wishful thinking. Do you really think the NY Democrats that enacted these taxes will give you a refund of any sort? Hell will freeze over before that happens.
John Pine August 24, 2012 at 04:43 AM
I support the decision, but remember when you refuse to give the MTA their money, they will take away the service, like the 2 trains Riverhead sees each day. Chairman Lhota has wasted no time threatening drastic service cuts and fare hikes, before looking at all their pricey real estate, like their headquarters on posh Madison Avenue. I'm tired of it. They have no problem taking millions of dollars from east enders yet provide a pitiful excuse for service out here, forcing people to the ripoff Jitney or get robbed by cabs. I think we need to seriously look at forming that Peconic Bay Transit Authority or some other Long Island based transportation authority to run the Long Island Railroad. In the end the MTA should probably broken up, it has gotten too big to run it's transportation assets properly. They hire hundreds of managers for jobs that could be done by just a few people, and complain that operating trains are too expensive, before they consider using fewer employees. Its 2012 and they still punch paper tickets instead of electronic fare control...cmmon!!
John Pine August 24, 2012 at 04:58 AM
A Long Island Transportation Authority should be formed to oversee the operations of LIRR and the bus systems. The LIRR would be contracted to a company like Veolia which could operate the service for much less. Here in Nassau it was a shaky beginning but NICE Bus is actually working well, operating a good level of service at a much lower cost. I was a major skeptic but it is going much better than I thought. The LIRR is the most unreliable part of my travels on Long Island public transportation, where trains are late 70-80% of the time, are dirtier than any bus on LI, but keep costing more. This nonsense has to stop. Its going to take teamwork between Nassau and Suffolk but I believe we can take control of the LIRR from the city and provide better service at a lower cost.
Vito August 24, 2012 at 11:04 AM
What about the portion of this tax that only applied to the self employed?
GLENN August 25, 2012 at 11:38 PM
Verizon just added it last month.
GLENN August 25, 2012 at 11:42 PM
Stop letting 90% of the employees go out on 3/4 disability and then go on SS disability, it's a scam this place is so mismanaged. I can't believe they got away with it for this long, the answer is not stealing from us, it is better management. What if the airline, electric companies, water dept. all decided they needed a little extra..then what?
Dr. Dan August 26, 2012 at 05:52 PM
So maybe a yacht dealer in Greenport may not see the benefit of rail service but I'll bet that many of his customers make their living on the west end of Long Island and NYC where the economic benefit of the LIRR is larger. Rail freight operations have been a part of LIRR operations since the beginning and is expanding. New York & Atlantic Railway 20,000 carloads per year. How about the Brookhaven Rail Terminal in Yaphank. This is an investment of $40 million. I'm pretty sure someone see's an economic benefit from local rail service.

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