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Volume 7 - Opinions of Counsel SBEA No. 39

Opinions of Counsel index

Tax lien (cancellation) (municipal annexation); Annexation (effect on tax liability) – General Municipal Law, § 710; Real Property Tax Law, §  02:

Property annexed to a village after the date on which town taxes became a lien remains liable for all town charges.

A question has been raised concerning the effect of the annexation of certain real property within the Village of Port Jefferson, located in the Town of Brookhaven. The property was annexed on December 31, 1978, and the Town Board of the Town of Brookhaven (wherein those parcels were located before and after the annexation) wishes to issue a partial refund of town taxes (viz., “the difference between the town tax and village tax”) to property owners affected by the annexation.

In general, the condition and ownership of real property as of taxable status date determine its liability for real property taxation (Real Property Tax Law, §302). Taxable status date for real property in Suffolk County is June 1 (Suffolk County Tax Act, §5). Taxes levied on assessment rolls prepared on the basis of that taxable status date become a lien on the following December first (id., §13(b)).

With very few exceptions, a change in condition and ownership subsequent to taxable status date will not affect the liability of real property for those taxes. Among those exceptions are transfers to the State or to the Federal government, both of which are immune from taxes (as opposed to being merely exempt). Even with respect the Federal and State government, ownership must be acquired prior to lien date for the property to be relieved of liability for taxes (see, e.g., 4 Op.Counsel SBEA No. 60).

Owners of real property within a village are liable for both village and town taxes, with certain exceptions. Among those charges for which real property located within an incorporated village is not (or may not be) liable are: (1) expenses necessary for the maintenance of a town board of health or for any expenditure authorized by such a town board (Public Health Law, §306(2)); and (2) certain expenditures for highways and bridges (Highway Law, §§277, 141).

In this instance, the property in question was liable for all general town charges as of June 1, 1978 (taxable status date) and as of December 1, 1978 (lien date). It is our opinion that the subsequent incorporation of these parcels within the Village of Port Jefferson did not relieve those properties of their liability for payment of all general town charges including those items enumerated above with respect to the Public Health Law and Highway Law. Our conclusion is based upon the language of subdivision 1 of section 710 of the General Municipal Law, which provides as follows:

1. All unpaid or delinquent taxes levied or charges made against or on account of any territory annexed pursuant to this Article and existing at the time such annexation takes effect, shall be due and payable and collected in all respects the same as if such territory had not been annexed. (Emphasis added).

Section two of 1978 Local Law No. 15 of the Village of Port Jefferson makes it clear that this annexation did occur in accordance with the provisions of Article 17 of the General Municipal Law, thus making the properties in question subject to the provisions of section 710, cited above. Therefore, the charges for which these parcels were liable at the time of annexation (namely, those taxes which were liens on December 1) are fully payable regardless of the subsequent annexation. (The State Comptroller has reached the same conclusion. See, Op.State Compt. 80-1).

Finally, a town may not legally issue a refund for which it is not liable. A payment of moneys, as proposed by the Town Board under these circumstances, would constitute a gift of public funds in contravention of Article 8, section 1 of the New York State Constitution (see, e.g., 13 Op.State Compt. 315 (1958); Op.State Compt. 67-617).

February 14, 1980

Updated: