MTA (MCTMT) Tax Ruled Unconstitutional; Appeal Certain

I prepare a number of New York tax returns for self-employed individuals. One of the more annoying tax returns is the Metropolitan Commuter Transportation Mobility Tax in the New York City metropolitan area. It’s not a large tax by any means, but it is additional paperwork that must be filed by my New York clients. However, that may be a thing of the past. The MCTMT represents about 15% of the revenue of the Metropolitan Transportation Authority (MTA).

This week a New York state court judge ruled that tax unconstitutional. “The bill [authorizing the tax] is unconstitutional because it appropriates public monies for a local purpose…And that it is unconstitutional for imposing liability onto political subdivisions for the debt of a public corporation.” The court also found that the MTA must be self-sustaining.

There have been four previous lawsuits alleging that the MCTMT was unconstitutional. All of those failed. It will likely be many months before the ultimate fate of this lawsuit is known.

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