Senate Bill S5168

                                 BILL NUMBER:  S5168

 TITLE OF BILL :  An act to amend the tax law, in relation to the
definition of employer for purposes of calculation of the metropolitan
commuter transportation mobility tax

 PURPOSE :

This legislation relates to the definition of employer for purposes of
calculation of the metropolitan commuter transportation mobility tax

 SUMMARY OF PROVISIONS :

Section 1. Subsection (b) of section 800 of the tax law, as amended by
section 1 of part B of chapter 56 of the laws of 2011, paragraph 4 as
amended by section 1 of part YY of chapter 59 of the laws of 2015, 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 (three) four hundred
(twelve) thirty-seven thousand five hundred dollars in any calendar
quarter; other than:

(1) any agency or instrumentality of the United States;

              

(2) the United Nations;

(3) an interstate agency or public corporation created pursuant to an
agreement or compact with another state or the Dominion of Canada; or

(4) Any eligible educational institution. An "eligible educational
institution" shall mean any public school district, a board of
cooperative educational services, a public elementary or secondary
school, a school approved pursuant to article eighty-five or
eighty-nine of the education law to serve students with disabilities
of school age, or a nonpublic elementary or secondary school that
provides instruction in grade one or above, all public library systems
as defined in subdivision one of section two hundred seventy-two of
the education law, and all public and free association libraries as
such terms are defined in subdivision two of section two hundred
fifty-three of the education law.

§ 2. Subsection (a) of section 801 of the tax law, as amended by
section 1 of part N of chapter 59 of the laws of 2012, is amended to
read as follows:

(a) For the sole purpose of providing an additional stable and
reliable dedicated funding source for the metropolitan transportation
authority and its subsidiaries and affiliates to preserve, operate and
improve essential transit and transportation services in the
metropolitan commuter transportation district, a tax is hereby imposed
on employers and individuals as follows:

(1) For employers who engage in business within the MCTD, the tax is
imposed at a rate of thirty-four hundredths (.34) percent of the
payroll expense for employers with payroll expense in excess of four
hundred thirty-seven thousand five hundred dollars in any calendar
quarter. If the employer is a professional employer organization, as
defined in section nine hundred sixteen of the labor law, the
employer's tax shall be calculated by determining the payroll expense
attributable to each client who has entered into a professional
employer agreement with such organization and the payroll expense
attributable to such organization itself, multiplying each of those
payroll expense amounts by the applicable rate set forth in this
paragraph and adding those products together.
(2) For individuals, the tax is imposed at a rate of thirty-four
hundredths (.34) percent of the net earnings from self-employment of
individuals that are attributable to the MCTD if such earnings
attributable to the MCTD exceed one hundred thousand dollars for the
tax year.

§ 3. This act shall take effect on the first of April next succeeding
the date on which it shall have become a law.

 EXISTING LAW :

Current law lowers the threshold for when the MCTD tax kicks in
forcing New Yorkers to pay a higher tax

 JUSTIFICATION :

The Metropolitan Commuter Transportation Mobility Tax Act (MTA
Mobility Tax) was signed into law by Governor Patterson in 2009. It
was a tax imposed on every employer and self-employed individual in
the 12 County MTA Service Region of New York State. The tax was
triggered when an employer's payroll reached a certain dollar amount
or threshold.

The rates are as follows:

More than $312,500.00 but less than $375,000.00: 0.11% tax
More than $375,000.00 but less than $437,500.00: 0.23% tax
More than 437,501.00: 0.34% tax
Or
Self Employed Individuals more than $50,000: .34 % tax

The problem with this way of generating revenue is relatively simple.
Not all users pay for this, only businesses and self-employed
individuals must pay the tax. Our local businesses and taxpayers are
hurting and need to keep more of their hard-earned money.
Comparatively, the MTA must be made to tighten its fiscal belt and
demonstrate best practices to provide more efficient and effective
service.

Let us put everything in perspective.

The MTA is a recipient of significant funding. The MTA receives the
tax noted above. It also, receives over half of the petroleum business
tax receipts deposited in the state mass transit operating assistance
fund, which is paid for by motorists throughout New York State.

The MTA board continues to raise transit fares. As such, MTA riders
can expect the hikes to keep coming. The state pledged $8.3 billion
for the MTA five-year capital program. Additionally, the state raised
the MTA debt ceiling to allow for $14 billion in additional borrowing.

The MTA budget just continues to increase and so do the fares. The MTA
must get on the right track and manage their budget in such a way as
to show the state of New York that they are fiscally responsible.
Regrettably, that is not the appearance portrayed to most New Yorkers.
Contrary to that, most New Yorkers view the MTA as a "Money Pit"; an
agency that has had fiscal problems for years.

Recently a plan was approved to keep the $2.75 base fare the same, but
on March 19, 2017 the cost of 7- and 30-day MetroCards will go up, and
multi-ride bonuses will drop. It will be the sixth fare hike since
2008.

This bill when adopted will Increase the earning limit attributable to
businesses and self-employed individuals for purposes of calculation
of the metropolitan commuter transportation mobility tax thereby
saving business and self-employed New Yorkers approximately
$8,000,000.00. That is money that can be spent in local economies and
not in an inefficient government bureaucracy.

 LEGISLATIVE HISTORY :

None

 FISCAL IMPLICATIONS :

To be determined

 LOCAL FISCAL IMPLICATIONS :

To be determined

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