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State Court Declares MTA Tax Unconstitutional

NYPress — Thu, 23 Aug 2012 16:56:24 +0000

By Paul Bisceglio

Photo by peterkreder, courtesy of Flickr Creative Commons.

A State Supreme Court justice has overturned a tariff meant to bolster income for the Metropolitan Transit Authority.

The tariff, called the metropolitan commuter transportation mobility tax, requires employers in all 12 New York counties served by the public transportation provider to contribute 34 cents to M.T.A. for every $100 in payroll costs. The State Legislature passed tariff in May 2009 to save M.T.A. from an annual $2 billion short fall.

Suburban government officials and business owners opposed the law, however, because they believed that it forced them to support an agency that mostly benefited New York City. Counties including Nassau, Suffolk and Westchester filed a lawsuit which claimed the tax unconstitutionally appropriated public funds for a local project.

Justice R. Bruce Cozzens Jr. agreed. In a six-page decision, he stated, “The M.T.A. payroll tax is a special law, which does not serve a substantial state interest,” his 6-page decision stated. “This law should have been, according to the State Constitution, passed with either a Home Rule message or by message of necessity with two-thirds vote in each house. This did not occur, therefore this law was passed unconstitutionally.”

M.T.A. would lose $1.26 billion in revenue this year if the tax is eliminated, according to spokesman Aaron Donovan. The tax’s supporters believe this loss would have far reaching consequences for the entire state.

“This decision threatens the foundation of the state’s economy,” said Paul Steely White, Executive Director of the transportation advocacy group Transportation Alternatives.
“Public transportation is critical to the New York City metropolitan area — an area which provides 45 percent of the state’s tax revenue, paying for countless public services from Niagara Falls to Montauk.”

M.T.A. “will vigorously appeal today’s ruling,” a spokesperson told NY1.

The authority’s chances may be high: they pointed out in a statement that four previous challenges to the tax “making the same argument” have already been dismissed.

Tax Facts You Need to Know

admin — Wed, 26 Aug 2009 13:27:29 +0000

I often get a lot of tax-related questions in my business. Here are the answers to some of the most common queries:

• For how many years do I need to keep tax returns? You should keep your tax returns from 2008, 2007, 2006 and 2005. The IRS will usually only go back three years, and New York State will go back four years. If you practice fraud, they can go back seven years. Fraud entails understating your income by more than 25 percent, or taking fake deductions of more than 25 percent. The State of New York does not have any limitations. After eight years, the IRS destroys their microfilm records. You cannot get a copy of your tax return after eight years.

• What records should I keep? If you file a long form claiming medical expenses, taxes paid, contributions, etc., save all of these checks and records. If you prepared a short form tax filing, you do not need to keep anything except your income records. Shred your rent receipts, utility bills and bank statements. Make room at home. You should save records on any stocks that you purchased, but have not yet sold. When you sell a stock, you must provide the date of purchase and the stock’s cost, and the date of the sale and selling price. Not reporting the sale of stock on your tax return is one of the biggest problems taxpayers face. Some people say I lost money on the trade, so why do I have to report the loss? All sales of securities are directly reported to the IRS. Your tax return must match their records.

Also, keep records on all traditional, non-deductible and Roth retirement accounts that you opened and funded during your working years. When you reach age 70-and-a-half, you are required to make minimum annual distributions from your retirement accounts. Please remember “minimum” does not mean you have to take it all out at one time.

• Long-term care insurance premiums: These are deductible as a medical expense on your federal tax return, and New York State gives you a 70 percent tax credit on their return.

• Recovery rebate credit: If you did not file a 2007 tax return, you may still qualify for the maximum economic stimulus payment in 2008. Make sure you file.

• Other deductions: If you pay little or no New York State tax annually, and you complete a long form federal tax filing, you could be entitled to claim a sales tax deduction or schedule A for sales taxes paid.

• Surviving spouse’s home sale exclusion: A surviving spouse who sells a house or apartment that they live in as their home after 2007 can claim the $500,000 exclusion on a sale within two years after the death of the spouse. This is provided that the $500,000 exclusion was theirs legally before the first spouse died.
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Gary E. Reska offers individual and business taxes, and complete bookkeeping and business forms service. Contact him at 212-249-2525 or gary@garyreskatax.com.

Tax Issues Shutter H+H

admin — Fri, 29 May 2009 20:38:07 +0000

H+H Bagels’ two store locations, including the famed Broadway and West 80th Street shop, were shut down on May 29 because of a tax issue. Earlier that morning, a red sign was placed on the front door of the Broadway branch to inform customers about the closure of the city’s most well known shop, where bagels cost $1.30 a piece.

Police milled about the entrance, refusing to let customers inside, according to one witness.
That branch has since reopened, but the other outpost, at 639 W. 46th St. and 12th Avenue, was still shuttered as of Friday afternoon.

Photo by Scott Beale / Laughing Squid

The New York Department of Taxation and Finance took the enforcement action against H+H Bagels Inc. because the company owed state taxes.

According to department spokesperson Tom Bergin, two tax warrants were filed for the bagel company’s business name, First Toro Family Limited Partnership, which operates outside of the 2239 Broadway location. The warrants were filed at the end of 2008 in New York County: one for failing to pay $6,803 in withholding tax—that is, the taxes taken out of employees’ paychecks—and the other warrant for a failure to pay $16,482 in sales tax.

Amy Dukoff and Helmer Toro were the responsible names for that business. Bergin said that the state tax and finance department tried to resolve the debt with the business.

“We were unable to do so, so we seized the business,” Bergin said. “The owner, or responsible person, paid the liability in full so we allowed them to reopen.”

The company has yet to repay taxes owed by the 639 W. 46th Street location, which is the location for two businesses: Sixth Toro Family Limited Partnership and a manufacturing outfit called United Production Service Inc. Three warrants were filed against Sixth Toro Family Limited Partnership: two in November 2008 and one in May 2009. The warrants for failure to pay a withholding tax and a sales tax total $26,539.

United Production Service Inc., the manufacturing arm of the company, has four warrants, all for failing to pay $57,392 in withholding tax. That has yet to be paid by Toro.

“I can’t pretend to know when the owner will pay up and get reopened,” Bergin said.

H+H Bagels Inc. did not return calls for an official response.

OUR NANNY TAX PROBLEM

admin — Thu, 29 Jan 2009 20:46:00 +0000

There’s no such thing as an honest mistake in politics, just like there’s no such thing as gender parity when it comes to the scrutiny that candidates face when nominated to powerful positions in government.
Much has been made of the “tax” problems of President Obama’s choice to head the Treasury Department. Tim Geithner failed to pay Social Security and Medicare taxes for a domestic household employee whose legal immigration status lapsed during her employment. Supporters praised his stellar credentials and stints as president of the Federal Reserve Bank of New York and as a senior official of the International Monetary Fund. They insisted it was an “honest mistake.”
Geithner has been confirmed as Secretary of the Treasury (which fined him for his errors). But his “nanny tax” problem reveals the lingering two-tiered litmus test for nominees.
President Bill Clinton’s initial choice for attorney general was dynamo Zoe Baird, who had worked in the private sector, was a professor at Yale Law School and also served as a counsel to President Jimmy Carter. Like Geithner, Baird paid back taxes and penalties and also paid a fine because her domestic worker, like Geithner’s, was illegal.
Strangely enough, at least initially, Senate Republicans did not seize upon the issue to tank Baird and supported her nomination despite the “nanny tax” issue. But Baird was crucified by the press, abandoned by Senate Democrats and painted as an arrogant aristocrat too cheap to pay her share of tax burdens, forcing her to withdraw.
President George W. Bush’s first nominee for Secretary of Labor, Linda Chavez, experienced a similar flameout when reports surfaced that she housed and paid an undocumented domestic worker for years. Ditto Clinton’s second nominee, Kimba Wood, for hiring an undocumented worker even though it was legal to do so at the time.
Apparently it’s OK for Geithner to have made “honest mistakes” about his taxes because the country needs his genius in a time of economic crisis, but Baird, Wood and Chavez were expendable. Even the manner in which Caroline Kennedy recently withdrew her name for consideration as Gov. Paterson’s nominee for Hillary Clinton’s Senate seat was tainted by the suggestion that there was a “nanny” problem, presumably one to do with taxes.
Perhaps Geithner is the guy to bring the country around and gender has nothing to do with it. Perhaps the country has grown more tolerant on the issue of undocumented domestic workers during the past 16 years. But maybe it’s something as simple as the fact that when women make “honest mistakes,” the men who are ultimately responsible for deciding the women’s confirmation prospects are less forgiving. After all, women only make up 16 percent of the U.S. Senate. Until women reach parity in numbers, we will have a hard time overcoming these double standards.
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Katherine B. Huang is an attorney and adjunct instructor in criminal justice at ASA College and adjunct instructor in the political science department at Queens College.