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Volume 4 - Opinions of Counsel SBEA No. 19

Opinions of Counsel index

Real property, definition of (sports and tennis complex) - Real Property Tax Law, § 102(12)(b):

Despite a building contract which calls for the portability of all items in a tennis and sports complex (including walls and roof, ice skating rinks, scoreboards, and seats), the buildings themselves and the rinks are real property and taxable as such. Articles such as elevators, central air conditioning equipment, lighting and wet sprinkler systems, which would ordinarily remain in a building sold or vacated, are presumed to be permanently installed and are real property even if removable without injury. Scoreboards are realty depending on their size and manner of affixation. Where an article such as seats is specially designed for the building housing it and would be of little use elsewhere, the article is real property.

We have received an inquiry concerning the taxable status of a tennis and sports complex. The assessor has provided a detailed description of a tennis complex, two ice skating rinks and particular items located in the complex (e.g., scoreboards and seats), and the question is whether any or all of these properties may be nontaxable since the building contract apparently calls for the portability of all items including all steel construction, walls, and roof.

Paragraph (b), subdivision 12, of section 102 of the Real Property Tax Law provides in part as follows:

§ 102. Definitions
* * *
12. “Real property”, “property” or “land” mean and include:
(b) Buildings and other articles and structures, substructures and superstructures erected upon, under or above the land, or affixed thereto,...

It should be clear from the above definition that the buildings themselves (i.e., the tennis complex, and the ice skating rink structures along with connecting buildings) are structures or erections within the meaning of the statute, since they are erected upon or affixed to the land itself, and as such they are real property subject to taxation. The fact that a building contract states that such structures may be portable does not vary this conclusion since the statute does not provide for such a distinction.

The only doubts as to taxability arise, in our opinion, in regard to particular items of property which are located in these structures, such as scoreboards, seats, lighting and wet sprinkler systems. In question is whether such items are “articles . . . erected upon, under or above the land, or affixed thereto,” within the meaning of the statute.

As a practical matter, the determination of whether a given article affixed to realty is real or personal property depends upon objective criteria. Set forth below are some guides which indicate whether or not articles are permanently installed.

First, we believe a distinction exists between articles ordinarily found in a building regardless of the activity being carried on and articles used in connection with a business being conducted on the premises. Thus, articles such as elevators, central air conditioning equipment, lighting and wet sprinkler systems, which would ordinarily remain in the building if sold or vacated, would be presumed to ave been intended to be installed permanently and are real property en if removable without injury.

Whether items such as scoreboards are real property depends upon the installation (see, e.g., People ex rd. 100 Park Avenue v. Boyland, 144 N.Y.S.2d 88, aff’d, 309 N.Y. 685, 128 N.E.2d 325; People ex rel. National Exhibition Co. v. Miller, 263 App. Div. 799, 31 N.Y.S.2d 581, aff’d, 288 N.Y. 698, 43 N.E.2d 88). The size of the scoreboard and the manner of affixation may be some evidence of a permanent installation. However, at least one lower court has implied that a scoreboard would not be real property for purposes of assessment and taxation. In New York Yankees v. Tax Com’n. of City of New York, 74 Misc.2d 752, 345 N.Y.S.2d 858, in determining that the proper method of valuing Yankee Stadium was by means of reproduction cost less depreciation, the court excluded from its calculation of such value, “. . . such items as the public address system, scoreboards, floodlights, lockers, signs and flagpoles.” (345 N.Y.S.2d, at 862). However, the special facts involved in that case should be kept in mind when considering the weight to be afforded the court’s rationale; in our opinion, the size of the particular scoreboard and the manner of its affixation would appear to be controlling on the issue of whether or not the property is realty and therefore taxable.

As for seats in the ice rink, two cases have held that stadium type seats in the Polo Grounds and Yankee Stadium were personalty and therefore not taxable (see, People ex rel. National Exhibition Co. v. Miller, supra, and New York Yankees v. Tax Com’n. of City of New York, supra). However where an article is placed in a building specially designed to house it or the article is specially designed for the building housing it and would be of little use elsewhere, it is real property. An example of such article would be rounded banks of seats for an opera building.

We are also asked whether pipes and compressors are taxable as real property. Paragraph (e), subdivision 12, of section 102 of the Real Property Tax Law specifically mentions “pipes” as real property for taxation purposes, and it is our opinion that compressors would fall into one of the taxable categories set out in paragraph (f), subdivision 12, of section 102, viz., “[b]oilers, ventilating apparatus, elevators, plumbing, heating, lighting and power generating apparatus, shafting other than counter-shafting and equipment for the distribution of heat, light, power gases and liquids. . . .”

October 29, 1974

Updated: