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Volume 8 - Opinions of Counsel SBEA No. 16

Opinions of Counsel index

Villages (non-assessing units) (optional exemptions) - Real Property Tax Law, §§ 102(1), 1402:

The decision by a village to terminate its status as an assessing unit does not affect its status as a municipal corporation with the right to grant optional exemptions such as the aged exemption. However, the determination of eligibility for such exemptions will be made by the town or county assessor responsible for the preparation of the village roll.

Pursuant to subdivision three of section 1402 of the RPTL (added by chapter 735 of the Laws of 1983), most villages have the option of adopting a local law providing that the village will cease to be an assessing unit and that village taxes will thereafter be levied on a copy of the applicable part of the town or county assessment roll. We are asked what effect the exercise of such option will have on the village, in its capacity as a municipal corporation, to determine whether and to what extent optional exemptions (e.g., RPTL, § 467) should be available from village tax levies.

Paragraph (c) of subdivision three of section 1402 provides, in part, that once the town or county assessor has received notice of the enactment of the local law pursuant to section 1402(3):

the assessor of the applicable town or county shall thereafter annually prepare a copy of that part of the final town or county assessment roll applicable to the village, which copy shall conform to the applicable part of the town or county assessment roll except for assessments made or approved by the state board pursuant to title two-A and two-B of article four [i.e., railroad ceilings], title 2 of article five [i.e., state-owned land] and article six [i.e., special franchise] of this chapter, which assessments for village purposes may differ from the assessments for town or county purposes.

Although a village that adopts a local law as provided in section 1402(3) is no longer an “assessing unit” within the meaning of subdivision one of section 102 of the RPTL, it obviously remains a village and a “municipal corporation” as that term is defined in subdivision 10 of section 102. In our opinion, notwithstanding the above-quoted portion of section 1402(3)(c), a non-assessing unit village retains whatever exemption policy authority is available to it as a village or municipal corporation.

Even prior to the addition of subdivision three to section 1402, town assessors were required to administer local option exemptions on behalf of the municipal corporations utilizing the town assessment roll (i.e., the town, county and one or more school districts). With respect to local option tax exemptions, each of these municipal corporations may exercise whatever options are available to it pursuant to State law. For example, the so-called aged exemption (RPTL, § 467) may be granted where it is adopted by the governing board of a municipal corporation pursuant to a local law, ordinance or resolution. Once the governing board decides to grant the exemption, it has the additional responsibility of setting a maximum income limit (currently) at a figure between $3,000 and $10,500 (subd. 3(a)). Thus, there are instances where an assessor prepares an assessment roll for which there is no aged exemption for town tax purposes, an exemption at a maximum income limitation for county tax purposes, and an exemption for school purposes based on the minimum income limit. In that case, although section 1302(2) of the RPTL requires the town assessor to “prepare for each school district wholly or partly within such . . . town a duplicate of that part of the assessment roll applying to such district[.]” it is obvious that, with respect to aged exemptions, the entries of taxable assessed values on the roll used for school purposes will differ from those used for town and county purposes.

The courts have also recognized the fact that local option exemptions may result in different taxable assessed values appearing on an assessment roll for different taxing purposes. For example, despite its eventual holding that certain property was entitled to the business investment exemption for school purposes, the Court of Appeals indicated no problem in stating, “When Newsday filed for a partial exemption under section 485-b of the Real Property Tax Law on May 10, the assessor stated that it would have an exemption from town, county, and special district taxes, but not school taxes” (Newsday, Inc. v. Town of Huntington, 55 N.Y.2d 272, 275, 434 N.E.2d 226, 449 N.Y.S.2d 157, 157 (1982)). More recently, another court confirmed the authority of a school district to “opt out” of the business investment exemption for school tax purposes, Walker v. Board of Assessors of Nassau County, 103 A.D.2d 580, 480 N.Y.S.2d 933 (2d Dept., 1984)). Similarly, section 420-b of the RPTL authorizes municipal corporations to enact a local law, ordinance or resolution, as appropriate, to tax the real property of certain nonprofit organizations (e.g., bible societies), and the courts have recognized that one or more municipal corporations utilizing a single assessment roll may .choose to tax such property while others do not (see, e.g., Mohonk Trust v. Board of Assessors of Town of Gardiner, 47 N.Y.2d 476, 392 N.E.2d 876, 418 N.Y.S.2d 763 (1979), fn.1).

In our opinion, where an assessor assesses property as of a particular taxable status date, there can be but one assessed value of that parcel, notwithstanding the exemption options chosen by the municipalities which will levy taxes against that assessment (e.g., town, county, school district, non-assessing unit village). However, the taxable assessed value of the parcel may vary for the various municipal purposes depending on the selected exemption options. For example, if a parcel is owned by a bible society, and the school district within which such property is located has opted to tax such property pursuant to section 420-b of the RPTL, the property may have a taxable assessed value of $50,000 for school purposes and a taxable assessed value of zero dollars for other municipal purposes because of the exemption it is entitled to receive from those municipalities’ taxes. In fact, it has been stated that, “the amount of the exemption has no bearing on the assessed valuation of the real property” (Archer v. Town of North Greenbush, 80 A.D.2d 361, 439 N.Y.S.2d 729, 731 (3d Dept., 1981) citing Town of Huntington v. State Board of Equalization and Assessment, 53 A.D.2d 6, 385 N.Y.S.2d 389 (3d Dept., 1976)). In that latter case, the court, in discussing the veterans exemption (i.e., RPTL, § 458) stated, “The amount of the exemption has no bearing on the assessed valuation of the real property or upon the market value of the property” (385 N.Y.S.2d at 390).

In an exception to the general rule, section 577(1)(b) of the Private Housing Finance Law provides that, “Where a municipality acts on behalf of another taxing jurisdiction in assessing real property for the purpose of taxation, or in levying taxes therefore, the action of the local legislative body of such municipality in granting such tax exemption shall have the effect of exempting the real property in such project from local and municipal taxes including school taxes, other than assessments for local improvements, levied by or on behalf of both such taxing jurisdictions.” Thus, it has been held that an exemption granted by a city applied as well to a school district utilizing the city assessment roll (District Three, IUE Housing, etc. v. Buckley, 74 Misc.2d 1078, 347 N.Y.S.2d 125 (S.Ct., Rens. Co., 1973; see also, 5 Op.Counsel SBEA No. 16). In our opinion, it is the above-quoted provision of section 577 of the Private Housing Finance Law which led to this result, and not the above-quoted provision of section 1302(2) of the RPTL.

Unlike the exemptions discussed above, section 466 of the RPTL is applicable only to village taxes. That section provides that the qualified voters of a village may adopt a proposition to provide a $500 exemption to real property owned by a volunteer member of the village fire department and the real property owned by any volunteer fire company in the village. Despite its applicability to village taxes only, in our opinion, the town assessor, who prepares a copy of the relevant portion of the town roll for use by a non-assessing unit village, should administer the exemption provided by section 466 just as he will any other exemption, based upon the policy chosen by the governing board of the village. It would be advisable for village officials to have a roster made of the village volunteer firemen for the town assessor’s use.

January 18, 1985

NOTE: Since the date of this Opinion, section 1402(3) of the RPTL was amended by chapter 280 of the Laws of 1985. That amendment does not alter the conclusion reached in this Opinion.