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Volume 12 - Opinions of Counsel SBRPS No. 14

Opinions of Counsel index

Cold War veterans exemption (retention of eligible funds or alternative exemption) - Real Property Tax Law § 458-b:

A veteran may not receive both a Cold War veterans exemption and an eligible funds veterans exemption or a Cold War veterans exemption and an alternative veterans exemption for the same municipal tax purpose. After the 10-year exemption period for the basic Cold War exemption expires, a veteran, who currently receives an eligible funds exemption, may again receive the latter exemption.

We have received two questions from a city assessor regarding the Cold War veterans exemption (Real Property Tax Law § 458-b as added by L 2007 ch 655 and amended by L 2008 ch 6). His county has adopted the exemption; his city has not yet done so.

Section 458-b authorizes counties, cities, towns, and villages to enact local laws providing a two-part partial exemption based on the honorable military service of a veteran who served in the United States armed forces during the period September 2, 1945 – December 26, 1991. A municipality may authorize an exemption of either 10 percent of assessed value, not to exceed $8,000 or $8,000 multiplied by the latest State equalization rate or (in special assessing units) the latest class ratio, whichever is less, or 15 percent of assessed value, not to exceed $12,000 or $12,000 times the rate or ratio, again, whichever is less. An additional exemption of one-half of a veteran’s service-connected disability rating to a maximum of $40,000 or $40,000 times the rate or ratio also applies. {1}  Municipalities may reduce the basic exemption cap to $6,000 or $4,000 and the disability portion of the exemption to $30,000 or $20,000. {2}  The basic portion of the exemption is limited to 10 years duration (§ 458-b [2] [c] [iv]); {3}  the disability portion is not so limited.

First, the assessor refers to section 458-b (2) (c) (ii) which provides that, if a Cold War veteran receives an eligible funds exemption (per RPTL § 458) or an alternative veterans exemption (per RPTL § 458-a), he or she may not receive the Cold War exemption. We are asked how this limitation is to be applied.

The quoted provision is comparable to that of section 458 (6) (b) which provides that in lieu of receiving an eligible funds exemption, a veteran may apply for the alternative exemption. In construing that provision, we concluded: “If a veteran resides in a town which grants the alternative veterans exemption but in a county which does not, the veteran may receive the alternative exemption for town tax purposes and an eligible funds exemption for county tax purposes” (10 Op.Counsel SBRPS No. 49). We also stated in that opinion:

Where, as in this example, a veteran's town authorizes the alternative exemption but his or her county does not, we believe it is too strict a reading of section 458(6)(b) to conclude that the veteran must receive no exemption for county purposes in order to receive an alternative exemption for town purposes. Instead, we [conclude] that the veteran could receive a different exemption for town and county taxing purposes.

We apply a similar analysis here. In our opinion, it would be too strict a reading of section 458-b (2) (c) (ii) to conclude that the veteran may not receive the Cold War exemption for county purposes because he receives the eligible funds exemption for city purposes. Instead, we think that the statutory limitation should be interpreted to mean that a veteran may not receive both a Cold War exemption and an eligible funds exemption or a Cold War exemption and an alternative exemption for the same municipal tax purpose. Where both exemptions are available for the same tax purpose and the veteran qualifies for both, he or she must choose which to seek. {4}

The second question is, after the 10-year exemption period for the basic Cold War exemption expires, a veteran, who currently receives an eligible funds exemption, may again receive the latter exemption. Given our just stated opinion, so long as veteran entitled to an eligible funds exemption is not receiving a Cold War exemption for the same municipal tax purpose, he or she may receive the eligible funds exemption. Note, however, that if the veteran, who otherwise qualifies for the eligible funds exemption did not previously receive it and his or her municipality offers the alternative exemption, then the veteran will not be able to receive a “new” eligible funds exemption (RPTL § 458 [6] [a] [i]); the alternative exemption may be an option for such a veteran.

October 22, 2008


{1}  In other words, as was true of section 458-a when it was first adopted, the exemption is “capped” at a veteran’s residence having a market value of $80,000. Homes having higher values would be limited to the same exemption amount as though they were valued at $80,000. For a discussion of how “caps” are applied in section 458-a, see 12 Op.Counsel SBRPS No. 2. They apply in a similar fashion in section 458-b.

{2}  In other words, the exemption cap may be reduced to a $60,000 or $40,000 home.

{3}  We note that when the alternative veterans exemption was first enacted (L 1984 ch 525), it too included a 10-year limitation on the basic wartime and combat zone exemptions (former § 458-a [2] [d] [iii]), but that provision was repealed in 1990 (ch 903). Given that history, it would not be at all surprising if, in the future, the 10-year provision of section 458-b is also eliminated. Of course, unlike section 458-a, which offered only a brief one-time opportunity for municipalities to opt-out of that exemption, section 458-b is an “opt-in” exemption, so a municipality granting the same may rescind it if it so chooses (see Wright v. Town Bd. of Ticonderoga, 169 AD2d 190, 572 NYS2d 397 [3d Dept 1991], app den 79 NY2d 751, 587 NE2d 289, 579 NYS2d 651 [1991]).

{4}  Based on the language of section 458 (6) (b), in 10 Op.Counsel SBRPS No. 49, we also concluded: “If the county subsequently opts to grant the alternative exemption, the alternative exemption automatically applies for both taxing purposes.” The language of section 458 b (2) (c) (ii) differs, however, so no automatic exemption switch would occur should the city hereafter adopt the Cold War exemption.

Updated: