Temporary Restraining Order Issued Regarding the Pied-a-Terre Tax
August 12, 2026On August 10, 2026, the New York State Supreme Court issued a temporary restraining order ("TRO") prohibiting New York City from assessing, collecting, or otherwise enforcing the pied-a-terre tax (the “PAT Tax”) (including current appeal deadlines) against anyone who received an “initial determination” letter, not just the actual plaintiffs in the case. On August 31, the Court will hold a hearing to determine whether the TRO should be extended as a preliminary injunction. On August 11, the City filed a Notice of Appeal and contended that proceedings to enforce the TRO are automatically stayed pending the resolution of the City's motion for leave to appeal. The plaintiffs responded, filing a letter with the court asserting that the City's argument that the TRO is automatically stayed is erroneous. If the plaintiffs ultimately prevail and obtain their requested sweeping relief, the current PAT Tax round is invalid, and New York City will have to re-start the entire process by issuing valid notices (at a minimum) and may even be forced to substantially restructure the PAT Tax’s current implementation.
The PAT Tax is now playing out like the Corporate Transparency Act, which went in and out of effect until ultimately put on indefinite hold after extensive and time-consuming litigation. Accordingly, in the near term, those who received an initial determination letter will have to decide whether to expend time and money on continuing compliance and/or protest efforts or take a wait-and-see approach (at the risk of getting caught out if the PAT Tax is reinstated with little or no timeline extension).
We’re continuing to review the implications of this decision and will provide updates as more information becomes available.
If you need more information about the PAT Tax or have questions about how the PAT Tax applies to your particular situation, please contact:
Mark A. Limardo at +1 (212) 592-1494 or [email protected]
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