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Volume 1 - Opinions of Counsel SBEA No. 43

Opinions of Counsel index

Railroad property sold to private party (apportionment of taxes) - Real Property Tax Law, Article 4, Title 2-A; § 932(2):

Where property of a railroad company is sold to a private party, the assessor must determine what portion of the original total assessed value of the railroad real property is represented by the area sold and the taxes and railroad ceiling are then apportioned in the same ratio.

Our opinion has been requested as to the correct procedure for the apportionment of taxes due on real property which is being sold by the Penn Central Railroad to a private party.

Pursuant to Article 4, Title 2-A of the Real Property Tax Law, the State Board annually establishes a ceiling on assessments of railroad real property (i.e., real property owned by a railroad and used by it for transportation purposes). The taxable assessed value of such property is the amount of the assessed value which is within such ceiling; the excess value, if any, is exempt from taxation.

Within the procedures of Title 2-A, the assessor bears the responsibility for establishing the total assessed value of all real property of the railroad, including both that property which qualifies for the ceiling and that property which is fully taxable. In the situation presented here, all of the Penn Central property in question is transportation property, and, therefore, subject to a ceiling.

Pursuant to subdivision 2 of section 932 of the Real Property Tax Law, the county treasurer may receive the taxes on part of a parcel of real property which is subject to a lien for delinquent taxes. In order for the county treasurer to accept this payment the assessment of the total parcel must have been apportioned by the assessor pursuant to section 932(1).

Therefore, upon the presentation by the grantee of proof of ownership and documentation of the area which has been sold, the assessor should determine what portion of the original total assessed value of all Penn Central Railroad (i.e., transportation) real property is represented by that area. When this apportioned assessment has been determined, the taxes (and, necessarily, the railroad ceiling) can be apportioned in the same ratio.

January 27, 1972

Updated: