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Volume 2 - Opinions of Counsel SBEA No. 34

Opinions of Counsel index

State of New York exemption (privately-owned property transferred to State) - Real Property Tax Law, §§ 404, 902; Albany City Charter, (City of Albany lien date) § 6, Article VII:

Where a privately-owned office building in the City of Albany is transferred to the State University of New York subsequent to taxable status date but prior to lien date, the taxes levied for that fiscal year are void. The Albany City Charter directs that the County of Albany levy the taxes for the City within a time period designated by the City Charter, and lien date for the City is the date upon which the tax levy is completed by the County.

Our opinion has been requested as to the potential taxable status of the Delaware and Hudson Railway Company office building located in the City of Albany if it is acquired during the last week in December by the State University of New York. A copy of a letter from the Commissioner of the Department of Assessment and Taxation for the City of Albany indicates that if State University acquires the property in December of 1972 then city and county taxes for the city fiscal year (November 1, 1972 to October 31, 1973) and for the county fiscal year (January 1, 1973 to December 31, 1973) will be due.

In the City of Albany, taxable status date for the assessment roll completed in 1972 was July 1, 1972, and real property owned by the D & H was fully taxable (except for the railroad ceiling exemption contained in Title 2-A of Article 4 of the Real Property Tax Law). Ownership by State University of New York is ownership by the State of New York, and real property owned by the State is exempt from taxation (Real Property Tax Law, § 404).

In general, the taxable status of real property is fixed annually according to the condition and ownership of the property on taxable status date (Real Property Tax Law, § 302). Therefore, when property owned by a private individual or organization on taxable status date is transferred to a tax exempt organization subsequent to taxable status date, such property remains subject to taxation for that fiscal year for which the taxes are levied. However, if property is transferred to the State (rather than to an individual or corporate owner) subsequent to taxable status date but prior to lien date, then it is settled opinion that the tax is void. In other words, when a transfer is made between taxable status date and lien date, the tax remains due in all cases except when the State is the grantee.

The reason that validly assessed taxes cannot be enforced against the State is to be found in the ancient doctrine of sovereign immunity as present in common law and in modern statutes. Simply stated, land owned by the State cannot be made subject to sale for the collection of unpaid taxes (the primary means set forth in the Real Property Tax Law), and taxable status date is not the controlling factor in such matters. Rather, the State will honor tax claims upon land it acquired only when such claims exist as liens at the time of acquisition. Absent a lien, it is well settled that taxes levied against a parcel cannot be enforced against the State (Matter of Melrose Avenue, 234 N.Y. 48, 136 N.E. 235; People v. City of New York, 120 Misc. 247, 198 N.Y.S. 860, aff’d 207 App. Div. 822, 201 N.Y.S. 931; In re Foreclosure of Tax Liens, 204 Misc. 76, 121 N.Y.S.2d 283).

Lien date for towns, which is governed by the Real Property Tax Law, is designated by statute as the first day of January of the fiscal year for which levied (Real Property Tax Law, § 902). However, in most cases, the levy, collection and enforcement of taxes by cities is governed by a charter adopted by each city. In such cases, the city charter must be analyzed to determine the lien date for that city.

In some instances a city charter will contain a specific provision analogous to section 902 of the Real Property Tax Law which designates a lien date for city purposes. However, the charter for the City of Albany contains no such provision. In the absence of a specified statutory lien date, it is clear that the lien attaches on the date upon which the levy of the tax is completed (i.e., when the tax roll is confirmed by the tax levying body) (Getman v. Niferopulos, 276 N.Y. 161, 11 N.E.2d 713). It is at this point in time that the exact amount has been legally charged to the real property and a sum certain due from the property owner can be ascertained.

The controlling provision in the Albany City Charter, as contained in section 6 of Article VII, directs that the County of Albany shall annually levy the taxes for the City of Albany. This levy by the County shall be “on or before December fifteenth, or such date as may be designated by resolution of the board of supervisors of Albany County, not later, however, than the first day of February in each year.”

The levy for the City of Albany, therefore, is done by the County of Albany within the time period designated in section 6. And when this levy is complete, the amount which the property owner must pay will be certain and the lien will attach. This date will be the lien date, and it will control the taxable status of the property which State University intends to acquire.

School district taxes become a lien as of the date and hour of the confirmation or final adoption of the school tax roll by the school authorities (Real Property Tax Law, § 1312). This levy was undoubtedly made during the late summer or early fall, and 1972-1973 school taxes undoubtedly will be due in full (and probably paid in full by this date).

December 29, 1972

Updated: