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Companies, Villages Shell Out Money for MTA Payroll Tax

If you didn’t know about the tax on payroll to help fund the Metropolitan Transportation Authority, you do now. The payroll tax has come due Nov. 2 with business owners and municipalities and school districts having to fork over 34 cents for every $100 of payroll. The tax affects all businesses and municipalities including school districts, nonprofit organizations that have a payroll and hospitals within the areas that are serviced by the MTA, including Nassau County.

“The bill is now coming due for this misguided plan and that will force our businesses and taxpayers to shell out millions of dollars to bail out the MTA. When Senate Democrats joined with Governor Paterson to hatch this plan, I called it a massive $1.5 billion mandate that will drive up local property taxes and force businesses to eliminate jobs and, today as I warn my constituents about this unwelcome bill, I think it is even more ridiculous,” stated Republican Senator John Flanagan, alluding to the fact that the payroll tax was part of a plan passed by the governor and Democratic legislators to bail out the fiscally beleaguered transportation agency. “This was the wrong approach back in May when it was approved without any public input and it is wrong now.”

Richard Bivone, chairman of the Long Island Business Council, said, “This tax is crippling businesses on Long Island and exemplifies how the system has failed the people of New York. The MTA payroll tax is killing any hope new businesses have to open, while encouraging existing businesses to take the train right off Long Island.”

The tax was due on Nov. 2 for the period covering March 1, 2009 to Sept. 30, 2009. The next due date will be Feb. 1, 2010 for the period covering Oct. 1, 2009 to Dec. 31, 2009.

For 2010 and beyond, the due dates are as follows:

April 30 for period covering Jan. 1 to March 31

July 31 for period covering April 1 to June 30

Oct. 31 for period covering July 1 to Sept. 30

Jan. 31 for period covering Oct. 1 to Dec. 31

For school districts, the payment schedule is a bit different.

“It’s more out-of-control taxation,” said Ed Mangano, the Republican candidate for Nassau County Executive. “Albany has saddled entrepreneurs, businesses, school districts and municipalities with a new tax. Businesses will pass this tax along to the residents of Nassau County, all to lessen the MTA’s intended fare increase; now every Nassau County resident will feel the pain of this tax.”

State Senator Charles J. Fuschillo, Jr. (8th Senate District), ranking member of the Senate Transportation Committee, voted against the MTA tax bailout plan.

“Ultimately, this tax will be passed onto Long Island’s families who are already overburdened with high school taxes and a bad economy,” he said previously.

Earlier this year, the Observer reported that the impact of the payroll tax on the Farmingdale School District totals $376,273. School districts, however, are supposed to get that money back at the end of the year.

Even if a payroll tax were not applied to school districts, it could still affect property taxes. Municipalities could find themselves having to raise property taxes in order to pay for the payroll tax. The impact to the Village of Farmingdale totals $6,629.

Debbie Podolsky, director of the Farmingdale Public Library and Chamber of Commerce president said, “Besides being an additional expense, the fact that it was retroactive to last March, after budgets were planned and approved, was unsettling.”