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Volume 11 - Opinions of Counsel SBRPS No. 49

Opinions of Counsel index

Veterans exemption (generally) (computation - change in level of assessment - applicability to municipalities which do not assess) - Real Property Tax Law, § 458:

The governing board of a county, city, town, or village that wishes to apply the change in level of assessment factor to its eligible funds veterans exemptions must adopt a local law so providing even if the governing board of the assessing unit in which it is located has done so. Therefore, despite that Nassau County assesses on behalf of the towns therein and that Nassau County cities and villages may choose to use the County roll as the basis of their assessments, those municipalities must adopt their own local laws if the change in level factor is to be applicable for their tax purposes.

We have received an inquiry concerning the change in level option of the eligible funds veterans exemption (Real Property Tax Law, §458(5)). The specific question is whether it is necessary for the cities, towns, and villages within Nassau County to adopt local laws to apply the change in level provision to their municipal taxes given that Nassau County previously opted to do so. In our opinion, if these other municipalities wish the change in level factor to apply to their taxes, they must also adopt local laws authorizing the use of such factor.

In general, the eligible funds exemption is limited to a $5,000 reduction from assessed value (RPTL, §458(1)(2)). However, in recognition of the effect a revaluation of assessments can have on “fixed-dollar” exemptions such as section 458, subdivision five (i.e., sometimes referred to as the change in level option) was enacted (L.1994, c.410).{1}  In relevant part, paragraph (a) of subdivision five provides:

Notwithstanding the limitation on the amount of exemption prescribed in subdivision one ... of this section, upon adoption of a local law by the governing board of a county, city, town or village that levies taxes or for which taxes are levied on an assessment roll, if the total assessed value of the real property for which such exemption has been granted increases or decreases as the result of a revaluation or update of assessments, and a material change in level of assessment ...is certified [by the State Board], the assessor shall increase or decrease the amount of such exemption by multiplying the amount of such exemption by the change in level of assessment factor. ***

It seems clear from the legislative history for chapter 410 of the Laws of 1994 (e.g., sponsors’ memorandum and Governor’s approval memorandum reprinted at 1994 NYS Legislative Annual, pp. 284, 285), that the drafters were concerned with protecting veterans from untoward reductions in their exemption benefit by reason of reassessment. It is equally apparent that the drafters contemplated revaluations resulting in assessments at a higher percentage of full value (most likely full value itself) than the assessment percentage applied before implementation of the revaluation. Nevertheless, the statutory language quoted above plainly addresses both increases and decreases in levels of assessment.

Apparently due to the statutory limitation on annual assessment increases imposed on Nassau County (RPTL, §1805), in its reassessment, the County chose to reassess residential property at a lower percentage of full value than had previously been applied. Consequently, such reassessment unaccompanied by a change in level provision would result in a magnification of the effect of eligible funds exemptions and cause a shift in the tax burden away from veterans and onto other property owners. Adoption of the change in level provision in Nassau County, therefore, helped to maintain the relative effect of eligible funds veterans exemptions without shifting the tax burden onto non-veterans.

It is also clear that the decision whether to apply the change in level factor is one made by a municipality, regardless of whether it is also an assessing unit, and regardless of whether it is itself a tax levying body or has its taxes levied on its behalf by another municipal corporation. That is, despite the fact that Nassau County assesses on behalf of the towns therein (Nassau County Charter, §602), and that Nassau County cities and villages may choose to use the County roll as the basis of their assessments (Nassau County Charter, §608; RPTL, §1402(2)), {2} it is up to those municipalities to choose if they wish to apply the change in level factor to the assessments of properties receiving eligible funds veterans exemptions that are used for purposes of their tax levies. To do so, these municipalities must adopt local laws pursuant to section 458(5) of the RPTL. {3}  Similarly, in most of the rest of the State, where towns assess and counties levy their taxes on those town rolls (and villages may choose to do so), those counties and villages must adopt their own local laws if the change in level provision is to apply to their taxes.

November 7, 2003


{1}  It actually replaced a previous subdivision five (i.e., the “pro rata” option).

{2}  Indeed, our records indicate that several Nassau County villages have terminated their assessing unit status and levy their taxes on the village portion of the County roll (RPTL, §1402(3); see, 8 Op.Counsel SBEA No. 16).

{3}  These municipalities may choose to adopt any or all of the options given to them under section 458(5), not just those elected by the County.

Updated: