State extends deadline for businesses seeking refund of MTA tax

Passengers run to board a New York City Passengers run to board a New York City bound Metro-North train at the Port Chester train station. (Feb. 10, 2012) Photo Credit: Rory Glaeseman

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Businesses that were victims of Hurricane Sandy will have until after the Thanksgiving holiday to file for refunds of a payroll tax that generates $1.8 billion in revenue for the MTA every year.

The state Department of Taxation and Finance extended Thursday's deadline to Nov. 26 for businesses who can show they were late filing claims because they were too busy dealing with the effects of the storm that touched down Oct. 29.

The extension covers all tax payments that had a deadline that fell between Oct. 26, 2012, and Nov. 26, 2012, including filings for personal, sales and highway taxes. No late fees or penalties will be assessed if taxpayers can show they were directly affected by the storm, state tax officials say.

Newsday reported Tuesday that nearly 244,000 businesses have filed protective claims seeking refunds of the so-called Payroll Mobility Tax.

The controversial tax's future has been left uncertain following a successful court challenge by a dozen suburban counties, including Westchester and Putnam.

In August, state Supreme Court Justice Bruce Cozzens in Long Islanddeclared the tax unconstitutional but allowed the state to continue collecting the tax from businesses while it pursues a legal challenge in the state Appellate Division.

The appellate court has not set dates for hearings on the issue. The MTA was turned down recently when it tried to get the state's highest court, the Court of Appeals, to hear its appeal.

Since 2009, the state has been collecting 34 cents for every $100 of payroll from businesses in the MTA region.

Without it, MTA officials say they would be forced to cut services and seek steep fare hikes.

Republican lawmakers including state Sen. Greg Ball have called the tax a "job killer."

Businesses that have filed claims are not guaranteed a refund but are protecting their right to get money back should Cozzens' decision be upheld.

State tax officials are warning businesses that there's a good likelihood that Cozzens' decision will be overturned since four similar rulings have already suffered the same fate.

"The constitutionality of the (payroll tax) has been challenged in a series of lawsuits," the state said in a statement to filers. "In all but one of these lawsuits in which there has been a decision, the (tax) has been ruled to be constitutional and the legal challenges have been dismissed."

Those interested in filing claims should go to the Tax Department Web site -- www.tax.ny.gov -- or call 518-457-5431.

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