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Volume 3 - Opinions of Counsel SBEA No. 40

Opinions of Counsel index

Nonprofit organizations exemption (local option to tax);
School district (taxable status date) - Real Property Tax Law, §§ 421, 1302:

A municipality cannot invoke the provisions of section 421 (1)(b) unless a local law, ordinance, or resolution is in effect on the taxable status date which governs the assessment roll on which such property is sought to be taxed. A school district has no authority to make changes on the school assessment roll relating to the taxable status of real property transferred subsequent to taxable status date.

We have received an inquiry relating to the taxation of real property pursuant to paragraph (b) of subdivision 1 of section 421 of the Real Property Tax Law.

A municipality cannot invoke the provisions of paragraph (b) unless a properly enacted local law, ordinance or resolution is in effect on the taxable status date which governs the assessment roll on which such property is sought to be taxed. In the granting of exemptions from taxation for private and municipally owned real property, it is an extremely well established principle that the date as of which an exemption is to be determined is the taxable status date which governs the assessment in question (Semple School for Girls v. Boyland, 308 N.Y. 382, 126 N.E.2d 294; Young Israel of Far Rockaway, Inc. v. City of New York, 59 Misc.2d 4, 297 N.Y.S.2d 671, rev’d on other grounds, 33 App.Div.2d 561, 305 N.Y.S.2d 432). The same rule applies in the reverse in that property can only be made subject to taxation on the assessment roll immediately subsequent to the taxable status date upon which the exempt status no longer exists. “It is the use of the property at the time when the tax is assessed which determines whether it is exempt from taxation or not” (Mary Immaculate School v. Board of Assessors, 188 App.Div. 5, 175 N.Y.S. 701). This principle, of course, is the primary reason for the special statutory authority available to New York City and the assessing units in Westchester County to add to the tax rolls real property which becomes subject to taxation subsequent to taxable status date (Real Property Tax Law, § 494).

As to the taxable status date which is applicable to a school district, the law is quite clear that for school district tax purposes, the taxable status date of the city, town or county, as the case may be, shall be controlling (Real Property Tax Law, § 1302(3)). It is true that in prior years school districts had authority to make changes on the assessment roll subsequent to its delivery to the school district officials and prior to the school tax levy. Such changes were authorized in cases of final determinations of exemptions and the valuations of any improvements to real property which had been completely demolished, destroyed or removed by reason of casualty or other cause prior to the confirmation of a school tax roll (Real Property Tax Law, § 1302(3)).However, this statutory authority was eliminated pursuant to an amendment to subdivision (3) by the Laws of 1968, Chapter 901.

We are of the opinion, therefore, that the school district has no authority to make changes on the school assessment roll relating to the taxable status of real property as determined by the assessor.

Finally, the authority in Title 3 of Article 5 of the Real Property Tax Law, with particular reference to section 558, is, we believe, extremely limited in its application. The correction of clerical errors and illegal assessments is an authority which tax levying bodies may exercise in the very limited circumstances in which the laws are applicable. The authority for the school district to act in such instances is contained in section 1316 of the Real Property Tax Law. Section 558 is a statute which has been amended in a manner which has made its true meaning quite ambiguous, if not completely obscure. The section originally read as follows:

Whenever by the final judgment of a court of competent jurisdiction, it appears to the board of supervisors that any property liable to taxation in any year was erroneously or illegally assessed, and that by reason of such erroneous or illegal assessment, such property did not become subject to taxation for such year, the board shall place the same on the roll of the current year at the valuation thereof, if any, fixed by the assessors for such preceding year; and in case no valuation was fixed by the assessors, such property shall be assessed by the board at such valuation as they may determine for the preceding year.

It is apparent that this section was considered necessary in order to implement orders of the courts in certiorari proceedings. However, subsequent amendments to the section have made its application extremely difficult and tentative. In our judgment this is the sole application of section 558, and it certainly has no relation to the subject matter which is under discussion here.

October 2, 1973

NOTE:  Sections 558 and 1316 referred to above have been repealed and a new “correction of errors” procedure adopted (L. 1974, c 177).

Updated: