NEW YORK: Income Tax: Bank Corporation MTA Surcharge Return Instructions Modified

Abstract

In TSB-M-07(8)C, Technical Services Bureau, Taxpayer Services Division, New York Department of Taxation and Finance, New York has announced that the instructions for the 2007 Form CT-32-M, Banking Corporation MTA Surcharge Return, will correct an error in interpretation that was reflected on previous years' forms pertaining to the calculation of corporate income tax credits. The Metropolitan Transportation Authority (MTA) surcharge is imposed on corporations that are subject to the franchise tax on banking corporations and are doing business in the Metropolitan Commuter Transportation District.

New York has announced that the instructions for the 2007 Form CT-32-M, Banking Corporation MTA Surcharge Return, will correct an error in interpretation that was reflected on previous years' forms pertaining to the calculation of corporate income tax credits. The Metropolitan Transportation Authority (MTA) surcharge is imposed on corporations that are subject to the franchise tax on banking corporations and are doing business in the Metropolitan Commuter Transportation District.

The corrected instructions clarify that all banking corporations subject to the MTA surcharge for whom the highest measure of tax before the application of tax credits is entire net income, including taxpayers whose tax credits reduce their franchise tax to the fixed dollar amount of $250 (or less if applying the credit for servicing mortgages), will be required to recalculate the tax measured by entire net income using a 9% tax rate when computing the MTA surcharge tax base. This change applies to tax years beginning on or after January 1, 2007.

Previously, (in the instructions for the 2000 form and continuing through the 2006 form instructions) the MTA surcharge was based on the fixed dollar amount of $250 and banking corporations whose highest measure of tax was entire net income were not required to recompute the tax. Banking corporations that benefitted from the interpretation previously in effect will not be required to file amended returns and will not be assessed additional tax. TSB-M-07(8)C, Technical Services Bureau, Taxpayer Services Division, New York Department of Taxation and Finance, October 9, 2007