Exempts self-employed persons, localities, school districts and not-for-profit corporations from the MTA mobility tax.
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 metropolitan commuter transportation mobility tax; and to repeal certain provisions of such law relating thereto
PURPOSE: To exempt self-employed persons, localities, school districts and notfor-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Section Two: Subsection (e) of section 800 of the tax law is REPEALED.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Section Four: Subsection (b) of section 804 of the tax law is REPEALED.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 cushion 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.
STATE OF NEW YORK ________________________________________________________________________ 4716--A 2011-2012 Regular Sessions IN 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.