This week has not been smooth for supporters of the tax in New York City from pied to terre. On Monday, former Secretary of Commerce Wilbur Ross filed a lawsuit against the state of New York, claiming that this tax is unconstitutional. On Tuesday, a judge ruled that New York City must withdraw the notices sent to homeowners, which is essentially equivalent to having to start the entire process over again.

Prior to this, the introduction of this tax was already a very chaotic process, accompanied by threats and warnings: The young mayor released a video introducing the tax outside the residence of billionaire Ken Griffin, suggesting that it might lead to high-value properties leaving New York. However, these threats did not come true.

What actually happened was litigation. On Monday, Ross joined the growing list of people suing the city of New York or the state of New York. In an interview with Fortune magazine, Ross stated that this new tax on luxury second homes targets the only group of homeowners who are unable to vote against it.

"They don't want to suffer voter retribution for taxes in the ballot boxes, so they impose these taxes on those who have no way to protect themselves."Ross said."That's the whole reason."

Ross, his wife Hillary Giri Ross, and casino developer Steve Wynn filed a lawsuit against the State of New York on Monday in Suffolk County Supreme Court. All three reside in Florida but own apartments in Manhattan. According to the complaint, the New York City Finance Bureau issued a bill of $83,531.52 to the Rosses' cooperative apartment and a bill of $183,094.69 to Wynn.

Ross's lawsuit

Under the leadership of James Carterson, a partner at Pillsbury Winthrop Shaw Pittman Law Firm, Ross's lawsuit presented three main arguments. First, the so-called "surcharge" is actually a property tax, as it is levied based on the value of the property and bills are issued through New York City's property tax system. Failure to pay can result in a lien on the property. The complaint alleges that this violates the state constitution, which limits the amount that New York City may raise through property taxes. The new law stipulates that this portion of surcharge revenue is not included in that limit.

"The state government cannot change its constitutional reality with a single decree."Ross said."What exactly is the surcharge being levied on?"

The complaint also alleges that taxing homeowners based on their place of residence constitutes discrimination against residents from outside the state. This lawsuit argues that it violates the Privileges and Immunities Clause and the Commerce Clause of the U.S. Constitution, as well as the Equal Protection Clauses in both the federal and state constitutions.

"According to their theory, there are no restrictions at all for non-residents,"Ross said."We can levy a tax of 100% on properties every year. 200% even."

Ross denied the officials' claim that "some residents do not pay their fair share at certain times." He stated that property owners affected by this tax do not utilize a large portion of New York City's expenditures on education, healthcare, and welfare, and also make less use of police, fire, and garbage removal services, as they stay in New York City for less than half a year each year.

"How is it possible that you could consume more in less than six months than others do in a whole year?"He said. He also stated that non-residents already pay more taxes because the value of their property is higher, and moreover, owners of non-residential cooperatives and condominiums do not enjoy the tax reductions that homeowners of primary residences are entitled to.

"If my next-door neighbor in the building also lives in an apartment of the same size as mine, I would have to pay more taxes than him."He said.

When Fortune reiterated that New York Governor Kathy Hochul stated that this tax was aimed at bridging the gap among New York homeowners who “do not reside in New York City or do not pay New York City income tax,” Ross responded:"There's no difference at all. This is a fabricated gap."

He is not against imposing higher tax rates on the wealthy, as long as these rates apply to everyone within the same tax bracket.

"I don't think it's a good idea, but it is legal,"He said.

Defend this tax

Forbes estimated Ross's net worth at around $600 million in 2019, although there were previous controversies claiming that he had exaggerated his net worth to between $2.7 and $3.7 billion. Regardless, according to Hortal's office, he and Steve Wynn (whose net worth Forbes estimates at $4.3 billion) precisely illustrate why New York needs pied -à- terre taxes.

"When Steve Wynn and Wilbur Ross attempt to portray themselves as sympathizers in a dispute over the fair sharing of payments involving millions of dollars in second-home transactions, they actually illustrate more than anyone else the necessity of pied -à- terre taxes,"Hawker's quick response was told to Fortune by supervisor Jan Goodman in a statement.

Governor Hochul believes that some of the wealthiest people in the world, as well as the powerful interest groups that act on their behalf, have more than enough capacity to help cover the costs of maintaining the operations of New York City's police force, garbage removal, and snow removal services.She continued to say."The governor is very proud to have signed this legislation, and the state government will defend it in court."

Ross called this statement "ridiculous" and stated that it does not address legal issues.

"It is either constitutional or unconstitutional."He said."Unconstitutional is unconstitutional."

Matt Rosenthalbach, a spokesperson for New York City Mayor De Blasio Mamdani, told Fortune in a statement:“pied -à- terre imposes a surcharge on the wealthiest individuals who own a second home in New York City but do not reside there, requiring them to pay their fair share for safer streets, cleaner parks, and better schools.”

"During the progress of legal proceedings, the City of New York will apply to intervene in these lawsuits and, together with our partners in Albany, defend this surcharge,"He continued to say."At the same time, we will continue to collect this surcharge in a fair, efficient manner that is fully compliant with the law, just as we have been doing from day one."

However, Ross believes that these statements do not address the constitutional issue of such taxation, and he indeed spends his money in New York City, even though they rarely stay there.

"We won't be staying here for long, so we must be frugal with our consumption,"He said."We often eat out, shop here, and use services like Uber and cars. So we do spend money here, and we also support some cultural institutions."

He said that these expenditures will support those workers, who in turn pay income tax to the city of New York. Owners affected by this tax..."Will hire more maids, more drivers, more Uber, more taxis, buy more things from shops, and also provide more support to charitable organizations,"He said."You can't just look at one side of things. You must take all factors into consideration."