A tax that the state imposed on New York City-area businesses to fund the Metropolitan Transportation Authority (MTA) was overturned by a Nassau state Supreme Court Justice last week. Four previous rulings have upheld the tax.
The MTA payroll tax was passed in 2009; it requires employers to pay the MTA 34 cents for each $100 in payroll costs. Suburban legislators and businesses have been strongly opposed to the tax because they say they are being forced to subsidize city transportation that they do not benefit from.
The suit was brought by Nassau, Suffolk and Westchester counties, which argued that the tax was unconstitutional because it violated local home rule.
The MTA said that it will appeal the ruling, and warned of service cuts, fare increases and a halt on capital projects if the decision is ultimately upheld. The state will continue to collect the tax while the case is on appeal.