Exempts the first $1,250,000 of earnings from self-employment during any tax year, from the metropolitan commuter transportation mobility tax

3 Co-sponsors

• David Carlucci
• Susan Serino
• Daniel L. Squadron

Title of bill

An act to amend the tax law, in relation to exempting self-employment earnings of one million two hundred fifty thousand dollars or less from the metropolitan commuter transportation mobility tax

Purpose

Exempts the first $1,250,000 of earnings from self-employment during any tax year, from the Metropolitan Commuter Transportation Mobility Tax in any calendar quarter.

Summary of specific provisions

Section one amends 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.

Section two is the effective date.

Justification

This measure would create parity, for the self-employed, who still have to pay the Metropolitan Commuter Transportation Mobility Tax (MCTMT). Enactment of Chapter 56 of the Laws of 2011 eliminated this tax for employers with payroll expenses less than $312,500. This tax poses both a financial and administrative burden on New York's self-employed, Currently, the self-employed pay a rate of .34, for earnings exceeding $50, 000.

Self-employed individuals pay their taxes as quarterly estimated taxes throughout the year. This includes the self-employment tax, social security and Medicare tax, at a rate of 15.3. The year is divided into four payment periods with specific due dates and penalties if payments are made late. The MCTMT also has a quarterly tax due dates but they do not correspond to the already established ones. This creates a greater administrative burden for the individual and may cause high accounting fees for those who are able to afford an accountant.

This bill would level the playing field by treating the self-employed with those employers with payroll expenses less than $312,500 in any calendar quarter.

Legislative history

2015: S.4616 - Reported to Finance 2014: S.3624 - Referred to Investigations/A.4888 - Held for Consideration W&M 2013: S.6330 - Referred to investigations 2012: S.6330 - Referred to Investigations/A.9314 - Referred to W&M

Fiscal implications

Undetermined.

Effective date

This act shall take effect April 1, 2017.