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New York State & Local Tax Update: December 2015

Posted 12:00 PM by

New York Tax Update

New York Updates Metropolitan Commuter Transportation Mobility Tax Publication

The New York State Department of Taxation and Finance has updated Publication 420, a guide to the metropolitan commuter transportation mobility tax (MCTMT), to provide guidance on computing, reporting and paying the MCTMT for tax years beginning on or after Jan. 1, 2015.

Publication 420 defines terms; provides applicable MCTMT rates; discusses the computation of payroll expense, filing requirements, penalties and interest, and collection matters; and examines how the MCTMT is treated on New York state tax returns.

Additionally, the publication addresses issues that are relevant to self-employed individuals, including:

  • How individuals must estimate MCTMT payments
  • What is considered net earnings from self-employment
  • Rules governing MCTMT returns for the self-employed

Finally, the publication examines special rules for partnerships and partners, including:

  • Estimating MCTMT payments made on behalf of nonresident individual partners
  • The group MCTMT return application process
  • Group estimated MCTMT payment requirements, and related issues

New York Issues Ruling on Taxability of Capital Improvements

Per a ruling In the Matter of the Petition of Sweet Construction Corp., the taxpayer failed to show that the construction services performed qualified as tax-exempt capital improvements.

While the taxpayer provided certificates of capital improvements (Forms ST-124), the certificates and invoices attached to forms ST-124 provided insufficient information to determine if the work qualified as capital improvements.

In the absence of any detailed description regarding the work performed, the taxpayer failed to demonstrate that the work they performed qualified as nontaxable capital improvements.

New York Issues Ruling on Officer Responsibility

Per a ruling In the Matter of the Petitions of Martin M Hopwood, Jr., the taxpayer willfully failed to “collect, truthfully account for and pay over” withholding taxes as an officer and shareholder of a mechanical contracting business. The administrative law judge found that the taxpayer's actions were willful for a variety of reasons, including:

  • Continuing the company's business operations despite financial difficulties
  • No effort made to cease a financially burdensome contract, alleviating further tax liabilities on that contract
  • Filing and reporting withheld taxes, but did not remit those taxes

The record revealed little evidence demonstrating that the taxpayer made any effort to ensure the requisite tax payments were made to the state. The administrative law judge further sustained the imposition of late payment penalties on the taxes due.

About the Author
Donna Niesen is a partner in Katz, Sapper & Miller’s State and Local Tax Group. Donna helps keep clients up-to-date on the multitude of tax rules and requirements in all 50 states. She guides them in the right direction as they address the complex issues that emerge on both the state and local levels. Connect with her on LinkedIn.

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