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EMPLOYERS ADVISED TO CONTINUE WITHHOLDING FOR NON-NEW YORKERS

State Taxation and Finance Commissioner Arthur J. Roth today advised New York companies to continue withholding New York City "commuter tax" payments for out-of-state residents who work in New York City until the issue is finally resolved by the New York State Court of Appeals.

Governor Pataki signed the legislation on May 27,1999 which eliminated the commuter tax applied to 450,000 New York State residents who commute to work in New York City, effective July 1, 1999.

"Non-New York residents who commute to work in New York City will continue to be subject to the non-resident earnings tax while New York residents will continue to benefit from the repeal as long as this issue remains before the courts," Commissioner Roth said.

More than 300,000 out-of-state commuters from all 49 other states, the District of Columbia, Puerto Rico and more than a dozen foreign countries paid the New York City non-resident tax in 1996.  The tax rate is .45 percent of wages and .65 percent of self-employment income.

Employers with questions about "commuter tax" withholding may obtain a copy of the technical memo TSB-M-99(5)(I), "Important Notice - Employer Reporting of New York City Wage" by contacting the Tax Department at (800) CALL TAX, or on the Internet at www.tax.state.ny.us.