Some Republican lawmakers from the region are urging businesses and self-employed individuals to file what’s known as a “protective claim” with the state Department of Taxation and Finance in the event the Metropolitan Transportation Authority payroll tax is found unconstitutional. A protective refund claim is one that is filed on an unresolved issue.
State Supreme Court Judge R. Bruce Cozzens in Nassau County ruled Aug. 22 that the tax — 34 cents for every $100 of payroll — is unconstitutional. The MTA has appealed the decision. The state Court of Appeals announced Thursday that it would not immediately hear an appeal of the August ruling and sent the case back to the Appellate Court.
Generally, claims for refunds must be filed within three years of filing a tax return, according to the Department of Taxation and Finance. Since payments started in November 2009, businesses have until Nov. 2to submit refund claims for the initial filing period. For self-employed people, the deadline is April 30, 2013.
The payroll tax has been changed so that it applies only to businesses that make more than $312,500 per quarter and self-employed individuals who make more than $50,000 in a tax year. Businesses that make between $213,501 and $375,000 per quarter are taxed at 11 cents per $100 of payroll. Those that make between $375,001 and $437,500 a quarter now pay 23 cents per $100 of payroll.
The state Supreme Court case that was decided Aug. 22 was filed in 2010 by Nassau County Executive Edward Mangano. Westchester and Putnam were among the counties that joined the lawsuit. Rockland County Executive Scott Vanderhoef has said the county would revive its own lawsuit against the payroll tax. Its lawsuit in state Supreme Court had been dismissed.
The Department of Taxation and Finance notes on its website that a number of lawsuits challenging the payroll tax have been filed. In all but one of the cases that have been decided, the levy was found to be constitutional.
“It’s time for Westchester’s taxpayers to take back what is theirs,” Assemblyman Robert Castelli, R-Goldens Bridge, said in a statement. “The MTA Payroll Tax robbed our job creators of money that they worked day-in and day-out to earn.
From the Department of Taxation and Finance website: