Exempts self-employed persons, localities, school districts and not-for-profit corporations from the MTA mobility tax.

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S4716A-2011 Actions

• Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Nov 2, 2011: PRINT NUMBER 4716B
• Nov 2, 2011: PRINT NUMBER 4716A
• Nov 2, 2011: AMEND (T) AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Apr 15, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S4716A-2011 Memo

BILL NUMBER:S4716A

TITLE OF BILL:
An act to amend the tax law, in relation to exempting earnings from
self-employment, for-profit corporations, not-for-profit corporations,
political subdivisions of the state and school districts from the metro-
politan commuter transportation mobility tax; and to repeal certain
provisions of such law relating thereto

PURPOSE:
To exempt self-employed persons, localities, school districts and not-
for-profit corporations from the MTA mobility tax.

SUMMARY OF PROVISIONS:
Section One: Subsection (b) of section 800 of the tax law, as added by
section 1 of part C of Chapter 25 of the Laws of 2009, is amended to add
any not-for-profit corporation, any political subdivision of the state
or any municipality, every agency and instrumentality thereof and school
districts to those entities that are not subject to the MTA mobility
tax.

Section Two: Subsection (e) of section 800 of the tax law is REPEALED.

Section Three: Section 801 of the tax law, as added by section 1 of part
C of Chapter 25 of the Laws of 2009, is amended to remove self-employed
individuals.

Section Four: Subsection (b) of section 804 of the tax law is REPEALED.

Section Five: Sets forth the effective date.

JUSTIFICATION:
Chapter 29 of the Laws of 2009 imposed within the Metropolitan Commuter
Transportation District a tax of 34 cents per every $100 of payroll on
nearly every employer and on the net earnings of the self-employed that
exceeds $10,000 annually.

Small business is the backbone of the New York State economy and the
self-employed are a significant component of this vital economic engine.
The self-employed can be a plumber, electrician, a day care provider;
small farmer, fisherman, or the local handyman. They work long hours to
make a living for themselves and their families. They are often trusted
mainstays in their community and relied upon by their neighbors to
provide vital services at an affordable cost.  These people epitomize
the entrepreneurial spirit yet have much less of a recession proof cush-
ion than larger business enterprises.

Not-for-profit corporations often operate on a shoe string and have
limited resources. In addition, many of the grant opportunities that
have assisted them financially over the years have dried up due to the

economic downturn.  Having to try to budget for this payroll tax has
been a crippling burden which needs to be lifted.

In terms of local governments, municipalities and school districts, a
good portion of the aid from the State and federal governments has been
cut.  Additionally, revenues coming into these authorities from other
areas have diminished. Taxpayers are already carrying enough of the
economic responsibility to keep these important entities and their vital
services functioning. As layoffs are being considered all around the
State in schools and government, it is time to reduce their financial
burdens by repealing the onerous 2009 MTA payroll tax.

While it would be ideal to repeal the entire MTA mobility tax across the
board for every business and entity affected, the 1.4 billion dollar
hole that would be created during a time when the State is already in a
fiscal crisis is problematic. This legislation begins the process of
repealing the tax by starting with those most crippled by its original
enactment and the domino effect that could affect hard-working New York
State taxpayers.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect on the first day of January next succeeding
the date on which it shall have become a law.

S4716A-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                   4716--A

                         2011-2012 Regular Sessions

                              I N  SENATE

                               April 15, 2011
                                 ___________

  Introduced  by  Sen.  BALL  --  read twice and ordered printed, and when
    printed to be committed to the Committee on Investigations and Govern-
    ment  Operations  --  committee  discharged,  bill  amended,   ordered
    reprinted as amended and recommitted to said committee

  AN  ACT  to  amend  the  tax law, in relation to exempting earnings from
    self-employment, for-profit corporations, not-for-profit corporations,
    political subdivisions of the state  and  school  districts  from  the
    metropolitan  commuter  transportation  mobility  tax;  and  to repeal
    certain provisions of such law relating thereto

    THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section  1.  Subsection (b) of section 800 of the tax law, as added by
  section 1 of part C of chapter 25 of the laws of  2009,  is  amended  to
  read as follows:

    (b)  Employer.  Employer  means  an  employer  required by section six
  hundred seventy-one of this chapter to  deduct  and  withhold  tax  from
  wages, that has a payroll expense in excess of two thousand five hundred
  dollars in any calendar quarter; other than:

    (1) any agency or instrumentality of the United States;
    (2) the United Nations; [or]
    (3)  an interstate agency or public corporation created pursuant to an
  agreement or compact with another state or the Dominion of Canada[.];
    (4) ANY FOR-PROFIT CORPORATION;
    (5) ANY NOT-FOR-PROFIT CORPORATION;
    (6) ANY POLITICAL SUBDIVISION OF THE STATE OR  ANY  MUNICIPALITY,  AND
  EVERY AGENCY AND INSTRUMENTALITY THEREOF;
    (7) ANY SCHOOL DISTRICT; OR
    (8) AN INDIVIDUAL HAVING NET EARNINGS FROM SELF-EMPLOYMENT FROM ACTIV-
  ITY WITHIN THE MCTD.
    S 2. Subsection (e) of section 800 of the tax law is REPEALED.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD02862-05-1

 S. 4716--A                          2

    S  3.  Section  801 of the tax law, as added by section 1 of part C of
  chapter 25 of the laws of 2009, is amended to read as follows:

    S 801. Imposition of tax and rate. (a) For the sole purpose of provid-
  ing  an  additional stable and reliable dedicated funding source for the
  metropolitan transportation authority and its  subsidiaries  and  affil-
  iates to preserve, operate and improve essential transit and transporta-
  tion  services  in  the metropolitan commuter transportation district, a
  tax is hereby imposed at a rate of thirty-four hundredths (.34)  percent
  of  [(1)]  the payroll expense of every employer who engages in business
  within the MCTD [and (2) the net earnings from self-employment of  indi-
  viduals  that are attributable to the MCTD if such earnings attributable
  to the MCTD exceed ten thousand dollars for the tax year].
    (b)[(1) An individual having net earnings  from  self-employment  from
  activity  both  within and without the metropolitan commuter transporta-
  tion district is required to allocate and apportion such net earnings to
  the MCTD in the manner required  for  allocation  and  apportionment  of
  income under article twenty-two of this chapter.
    (2) In the case of individuals with earnings from self-employment, the
  net  earnings  from  self  employment  threshold  in  paragraph  two  of
  subsection (a) of this section will be computed on an  individual  basis
  regardless  of whether that individual filed a joint personal income tax
  return.
    (c)] The determination of whether a covered employee is employed with-
  in the MCTD will be made by utilizing the rules applicable to the juris-
  diction of employment for  purposes  of  the  statewide  wage  reporting
  system  under  section  one  hundred  seventy-one-a  of this chapter and
  substituting the MCTD for the state in that application.
    S 4. Subsection (b) of section 804 of the tax law is REPEALED.
    S 5. This act shall take effect on the first of January next  succeed-
  ing the date on which it shall have become a law.