The state�s highest court has declined to hear a challenge to a controversial regional payroll tax for the Metropolitan Transit Authority.

The ruling by the Court of Appeals on Tuesday lets stand the tax in downstate counties that helps fund the region�s railroads, subways and buses.

The state Appellate Division of state Supreme Court in June rejected a constitutional challenge to the tax led by Nassau County. The top court denied a motion to appeal.

The tax was passed in 2009 to avert service cuts as the MTA faced a record deficit. Local officials say the tax is bad for business.

A spokesman for Nassau County Executive Edward Mangano says Tuesday the lawsuit has already resulted in the state eliminating the tax for thousands of small businesses in 2011.

(AP)