United States

New York MTA payroll tax protective refund claims update


Update: New York Court of Appeals closes door on MCTMT constitutionality question

On Jan. 14, 2014, the New York Court of Appeals denied the taxpayer’s motion for leave to appeal the decision of the Appellate Division in Mangano, et al. v. Silver, et al., holding that the metropolitan commuter transportation mobility tax (MCTMT) served a substantial state concern and, therefore, was not unconstitutionally passed without a home rule message.  The Court of Appeals’ decision to dismiss Motion No. 2013-1154 brings this issue to a close. 

Taxpayers that filed protective refund claims following the original decision by the New York Supreme Court finding that the MCTMT was invalid should be advised that no refunds will be due.

On June 26, 2014, the Appellate Division of the New York State Supreme Court issued its decision in Mangano v. Silver, overturning the lower court's holding that the New York Metropolitan Commuter Transportation Mobility Tax was unconstitutional. This decision may be subject to appeal to the New York State Court of Appeals, New York's highest court. Accordingly, taxpayers are advised to continue to pay the tax and file protective refund claims until the final outcome of this litigation is determined.

On Oct. 17, the New York State Department of Taxation and Finance (Department) issued important information for taxpayers regarding the Metropolitan Commuter Transportation Mobility Tax (MCTMT), including guidance on how to file protective refund claims in light of the New York Supreme Court’s holding in Mangano v. Silver that the MCTMT was void because it was passed in violation of state constitutional requirements (see New York court holds payroll tax unconstitutional). See our original alert on this topic.

On a webpage dedicated to the ongoing Mangano litigation, the Department advises all taxpayers that have been paying the MCTMT of its position that the tax is constitutional and indicates all taxpayers are required to continue to file returns and pay the tax. Further, the Department has advised taxpayers that protective refund claims made in advance of a final resolution of this matter generally must be made by 1) filing through an Online Service account; 2) completing an electronic form; or 3) calling 518.485.2392 and submitting an automated telephone application. Partnerships may file one protective claim on behalf of all qualified partners previously included on the partnership’s group MCTMT return (Form MTA-505). Partnership claims may be filed only by completing the electronic form or automated telephone application. There is no paper refund claim option, and taxpayers cannot file a protective claim for refund by amending MCTMT returns.

Taxpayers must file protective refund claims within the three-year statute of limitations. Employers that initially filed on or before Nov. 2, 2009 should file protective claims by Nov. 2, 2012. Self-employed individuals who initially filed on or before April 30, 2010 should file protective claims by April 30, 2013. By filing protective refund claims, taxpayers secure their rights to refunds in relation to the Mangano holding for all filing periods within the statute of limitations and all future filing periods.


The information contained herein is general in nature and based on authorities that are subject to change. RSM LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

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