Paychex Barred From Disputing Income Tax Rule, New York Argues

Paychex Inc.'s challenge to New York tax regulations on apportioning income to the state must be dismissed, the state tax department said.

The payroll services provider told a state trial court in July that the New York Department of Taxation and Finance’s December 2023 regulations “arbitrarily exclude from receipts a portion of the service consideration received by” professional employer organizations. But an audit settlement between Paychex and the agency precludes the company from pursuing that claim, the agency argued in a Sept. 6 memorandum urging the New York Supreme Court, Albany County, to toss the case.

Professional employer organizations provide ...