On Monday, North Fork businesses were happy to hear that a controversial state tax on small businesses and school districts, dedicated to funding the Metropolitan Transportation Authority, will be reduced — and even repealed — for some.
Implemented over two years ago, the tax was widely unpopular on the North Fork due to what many perceived as a service level through the Long Island Rail Road that .
"I'll bet if I polled my customers I'd be lucky to find one who gets out here using the train," said Mike Acebo, general manager at in Greenport. "I never had anybody explain how that tax helped my business in any way, shape or form."
The payroll tax measures, according to government officials, will cut the tax entirely for nearly 80 percent of small businesses in the MTA metro region, which encompasses 12 counties around New York City, and for all private and public elementary and secondary schools. The new sliding scale enacted reduces the tax for all businesses with annual payrolls under $1.75 million.
For businesses with an annual payroll under $1.25 million, the tax is eliminated entirely, affecting nearly 300,000 employers. Payrolls ranging from $1.25 million to $1.5 million will see a tax reduction from $0.33 for every $100 of weekly payroll down to $0.11, and those between $1.5 million and $1.75 million will see a reduction to $0.23.
The bill also raised the threshold for taxpayers who need to claim self-employment, affecting another 415,000 individuals, officials said.
While the amount smaller businesses paid out for the tax may not seem like too much — Joe Corso said his paid roughly $300 to $400 annually — the past couple of years has shown many small businesses that every penny counts.
"It doesn't have a huge impact, but it does," Corso said. "I'm cheap. If I can save $5 on something, that's $5 in my pocket."
Corso also added that the usefulness of the tax was suspect.
"I don't mind paying a tax knowing I'm going to get something for it. If I was getting my streets plowed, or another basic service, that would be one thing. But I know I was getting absolutely nothing. That was the bigger issue."
Mike Avella, owner of and , was more frank, calling the tax a "slap in the face."
In total, the measures are expected to put roughly $250 million back in the pockets of taxpayers.
With the loss in revenue for the MTA, the state will be expected to compensate the public benefit corporation through its own general fund.
Assemblyman Dan Losquadro, R-Shoreham, said “this gives the state a horse in the game. Our money is on the line now.”
Paul Romanelli, owner of Southold's said he was thrilled to hear about the legislation.
"My office is across from the Southold train station and I don't see too many people using it, nor any of my employees," he said. "It wasn't necessary for us to pay. So hopefully they just get their own expenses under control."