Volume 6 - Opinions of Counsel SBEA No. 45
Business investment exemption (local option) (reduction of percentage of exemption, effect on prior exemptions) - Real Property Tax Law, § 485-b:
Pursuant to subdivision 7 of section 485-b of the Real Property Tax Law, a municipality has the option to reduce the percentage of exemption. However, exemptions existing prior in time to such act are not subject to any such reduction.
We have received an inquiry relating to the business investment exemption authorized by section 485-b of the Real Property Tax Law as to the effect, if any, an act by a municipality reducing the exemption to zero would have on exemptions allowed in a prior year.
Section 485-b was added to the Real Property Tax Law by chapter 278 of the Laws of 1976 and provides for a declining ten year partial tax exemption on the increase in value resulting from certain new construction, alterations, installations or improvements for the purpose of commercial, business or industrial activity. Subdivision 7 of section 485-b authorizes any county, city, town or village to adopt a local law, and school districts to adopt a resolution, to reduce the percent of the exemption. Where no such action is taken by a municipality, the exemption applies with respect to the taxes to be levied by or on behalf of the respective municipality as set forth in subdivision 2(a) of section 485-b.
In prior opinions, we stated that a municipality has the option to reduce the percentage of exemption to zero (5 Op.Counsel SBEA No. 81), and that such reduction must have uniform application throughout the municipality (5 Op.Counsel SBEA No. 109). However, subdivision 7 of this law was amended during the 1977 legislative session (L.1977, c.397), and now reads:
7. A county, city, town or village may, by local law, and a school district which levies school taxes may, by resolution, reduce the percentum of exemption otherwise allowed pursuant to this section; provided, however, that exemptions existing prior in time to passage of any such local law or resolution shall not be subject to any such reduction so effected. A copy of any such local law or resolution shall be filed with the state board. (emphasis supplied)
The emphasized language was added by the aforesaid chapter 397.
Therefore, based on the amendatory language, should a municipality elect to exercise the option afforded by this section and reduce the exemption to zero, its act would apply prospectively with respect to new applications for exempt status. Individual properties previously granted partial exempt status would continue to be exempt for the full ten year term as provided in subdivision 2(a), or for a lesser term pursuant to a local act adopted prior to the initial granting of the exemption.
March 21, 1979