NYC Repeals Commuter Tax Worth $360 Million

Posted by accountingweb on Apr 5 2000 119 printer friendly

What's good for the goose may not be good for the gander - the New York Court of Appeals ruled Tuesday that the city of New York must tax every one of its commuters, or none at all. By repealing the commuter tax, the city stands to lose a $360 million revenue stream.

As a consequence, the New York State Legislature must determine how to fill the void caused by the huge loss.

The Court also held on Federal constitutional grounds that if the tax is not imposed on anyone who commutes in-state, then it cannot impose the tax on anyone who commutes out-of-state.

The argument in favor of keeping the tax is based on the idea that people who commute into the city benefit from other city services offered to them, without having to pay tax on services like gasoline, sales and unearned income.

Voice of the Editor

Even though any accounting auditor would tell you it seems like there are an awful lot of tax accountants out there, surely one-third of the country isn't made up of tax preparers, so it's rather startling news to learn that one-third of Americans like to do their taxes. Who knew?

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