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Volume 5 - Opinions of Counsel SBEA No. 97

Opinions of Counsel index

Business investment exemption (generally) (date of construction) - Real Property Tax Law, § 485-b:

In determining eligibility for exemption under the provisions of section 485-b of the Real Property Tax Law, it must be demonstrated that the construction on the subject property was commenced subsequent to January 1, 1976 and was completed subsequent to July 1, 1976.

Our opinion has been requested concerning the business investment exemption (Real Property Tax Law, §485-b). The specific question is as to the time construction is to or may commence with respect to property which may quality for the real property tax exemption authorized under this law.

Section 485-b became effective when approved by the Governor on June 8, 1976 (L. 1976, c.278). This section provides for a partial real property tax exemption limited to a ten year period on certain new construction, alterations, installations or improvements for the purpose of commercial, business or industrial activity where the cost of the addition exceeds $10,000. The provisions of the statute relevant to this inquiry are set forth in subdivision 1 which reads, in part, “Real property constructed, altered, installed or improved subsequent to the first day of July, nineteen hundred seventy-six for the purpose of commercial, business or industrial activity shall be exempt from taxation * * *,” and subdivision 2(b)(l) which provides that no such exemption shall be granted unless such construction, alteration, installation or improvement was commenced subsequent to January 1, 1976.

Accordingly, when determining eligibility under the provisions of this statute, two determinations must be made relative to the timing of the construction. First, it must be demonstrated that the construction was commenced subsequent to January 1, 1976. Second, it must then be determined that the construction was completed after July 1, 1976. Of course, the provisions of this statute would apply to otherwise qualified property where construction was commenced at a date subsequent to July 1, 1976 and the improvement was completed at a later date.

October 29, 1976

Updated: