Posted on September 14, 2012

A New York court recently declared the Metropolitan Commuter Transportation Mobility tax to be unconstitutional. Several municipalities outside New York City filed the lawsuit, claiming the tax:

* appropriated public funds for a local reason
* violated the home rule provisions of the state constitution
* imposed liability on political entities for a public company's debt

In order to make up for the Metropolitan Transportation Authority's budget shortfalls, the law imposed a payroll tax on regional employers in the five boroughs of New York City and the counties of Dutchess, Nassau, Orange, Putnam, Suffolk, Rockland and Westchester. The court sided with the municipalities, who felt they were being taxed for a service that only benefited urban New Yorkers.

The Metropolitan Transportation Authority plans to appeal the court's decision. Paycor will continue to calculate this tax during the appeals process.

Learn more about this case from the New York Press.