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Volume 10 - Opinions of Counsel SBRPS No. 48

Opinions of Counsel index

Annexation (effect on tax exempt status); Nonprofit organizations exemption (generally) (effect of municipal annexation) - General Municipal Law, § 710; Real Property Tax Law, § 420-a:

Where property receiving a nonprofit organizations exemption is located in an area of an assessing unit annexed by another assessing unit, there is no redetermination of tax exempt status until the annexing assessing unit’s next taxable status date.

Our opinion has been requested concerning the annexation of property. The question is whether the taxable status of a parcel receiving tax exempt status pursuant to section 420-a of the Real Property Tax Law is affected when the area of the municipality in which the property is located is annexed by another municipality, or whether the exemption continues until the following taxable status date.

In general, property is assessed according to its condition and ownership as of taxable status date (RPTL, §302). Determinations of taxable or exempt status (including those for parcels owned by nonprofit organizations) are also generally made as of such date (Semple School for Girls v. Boyland, 308 N.Y. 382, 126 N.E.2d 294 (1955)).

Section 710 of the General Municipal Law addresses the disposition of taxes and other charges against property in annexed territory. Subdivision one provides that unpaid and delinquent taxes existing at the time of annexation continue to be owed to the municipality from which the property was annexed, while subdivision two provides for an apportionment of other taxes levied for the fiscal year during which the annexation takes effect. Subdivision three of that section provides that, “Any taxes levied or other charges made against or on account of any territory annexed pursuant to this article for a fiscal year commencing after the date such annexation takes effect shall be due and payable to and collected by the annexing local government.”

Subdivision three was added (L.1990, c.529) to address the question of taxes levied for fiscal years commencing after annexation but which are based on assessment rolls with a pre-annexation taxable status date. We note that it includes no provision for a redetermination of assessed value or taxable status by the annexing government. Indeed, it seems most reasonable to assume that no such redetermination is intended upon annexation. Accordingly, in this case, in our opinion, the nonprofit organization’s tax exempt status remains in effect at least until the next taxable status date when the assessor of the annexing local government will make his or her own exemption determination.

October 15, 1997

Updated: