NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4888A
SPONSOR: Cusick (MS) 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 601 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 secu-
rity 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:
2013: referred to Investigations and Government Operations
2012: S.6330 - Referred to Investigations/A.9314 - Referred to Ways and
Means.
FISCAL IMPLICATIONS:
The Department of Taxation and Finance estimates that this proposal will
result in a $63 million revenue loss beginning in SFY 2013-14 and $90
million in SFY 2014-15.
EFFECTIVE DATE:
This act shall take effect April 1, 2015.
