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Metropolitan commuter transportation mobility tax (MCTMT) - covered employee

Covered employee

A covered employee means an employee (including a statutory employee) whose services are allocated to the MCTD.

Apply the following four successive tests to determine if the employee's services are allocated to the MCTD. If any test results in the allocation of the employee's services to the MCTD, the employee is a covered employee. You don't need to apply another test. Otherwise, proceed to the next test.

1. Localization

An employee's services are allocated to the MCTD if the employee performs them either:

  • entirely within the MCTD; or
  • both inside and outside of the MCTD, but the services performed outside the MCTD are incidental to the employee's services performed in the MCTD (for example, the services are temporary or transitory in nature, or consist of isolated transactions).

2. Base of operations

An employee's services are allocated to the MCTD if the employee's base of operations is in the MCTD. (This test cannot be applied if the employee has either more than one base or no base of operations.)

Base of operations means the place where the employee customarily starts out to perform his or her functions in or out of the MCTD. It's not the place where the employee is continuously located. It's where the employee customarily returns to:

  • receive instructions from his or her employer
  • receive communications from other persons
  • replenish stock and materials
  • repair equipment used
  • perform any other function necessary in the exercise of his or her trade or profession.

3. Place of direction and control

Allocate all services to the MCTD if an employee's direction and control emanate from only the MCTD and the employee performs some services within the MCTD.

Direction and control means the place from which the employer directs and controls the activities of the employee. It's not necessarily the location of the principal office, but rather the point from which basic authority over the supervision of services emanates (for example, the place where the employer assigns jobs, issues instructions, or maintains personnel and payroll records).

4. Residence

If none of the above tests result in a clear allocation of services, all of the employee's services are allocated to the MCTD if the employee resides there and performs some services in the MCTD. 

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