Wilbur Ross has turned New York’s pied-à-terre tax into a courtroom fight. On Monday, the former Commerce Secretary filed a lawsuit against the state in Suffolk County Supreme Court, calling the surcharge unconstitutional.
Ross and his wife, Hilary Geary Ross, joined casino developer Steve Wynn in the suit. All three are Florida residents who own Manhattan apartments. According to the complaint, New York City’s Department of Finance billed the Rosses $83,531.52 on their co-op and Wynn $183,094.69.
The tax drew another setback on Tuesday, when a judge ruled the city had to roll back the notices it sent to property owners and essentially start over. The rollout has already produced threats, warnings, and a wave of legal challenges.
Ross said the tax targets owners who cannot fight back at the ballot box.
‘They don’t want voter retribution for taxes at the ballot box, so they impose these taxes on people who have no way to defend themselves,’ Ross said. ‘That’s what this is all about.’
The suit argues the surcharge is really a property tax because it is based on property value, billed through the city’s property tax system, and becomes a lien if unpaid. The complaint says that violates the state constitution because New York caps how much the city can raise through real estate taxes. The law says surcharge revenue does not count toward that cap.
Ross also argues the tax discriminates against out-of-state residents and violates the U.S. Constitution’s Privileges and Immunities and Commerce clauses, along with equal protection guarantees in the federal and state constitutions.
He rejected the city’s claim that part-time owners are not paying their share. Ross said owners subject to the tax use none of the city’s spending on education or health and welfare, and less policing, fire protection, and trash pickup, because they spend less than half the year in the city.
‘How can you possibly consume more in less than six months than other people do in a whole year?’ he said.
Ross also said nonresidents already pay more because their homes are worth more and because nonresident co-op and condo owners do not get the tax abatement given to primary residents.
The governor’s office fired back. Jen Goodman, Kathy Hochul’s director of rapid response, said Ross and Wynn are helping make the case for the tax.
‘Governor Hochul believes some of the wealthiest people in the world, and the powerful interest groups fighting on their behalf, can afford to help pay for the police officers, trash pickup, and snow removal that keep New York City running,’ Goodman said. ‘The Governor was proud to sign this legislation, and the state will defend it in court.’
Ross said that answer does not resolve the constitutional question. For taxpayers and investors, the issue is larger than one surcharge: when government starts singling out nonresidents, the line between taxation and punishment gets thin fast. Capital rewards clear rules, and this fight is now testing whether New York still has them.
