Bill Text: NY A08334 | 2021-2022 | General Assembly | Introduced
Bill Title: Authorizes the county of Madison to impose an additional real estate transfer tax of up to two dollars per each five hundred dollars.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2022-07-21 - signed chap.397 [A08334 Detail]
Download: New_York-2021-A08334-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8334 2021-2022 Regular Sessions IN ASSEMBLY October 20, 2021 ___________ Introduced by M. of A. SALKA -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to authorizing the county of Madison to impose a tax on real estate transfers The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The tax law is amended by adding a new article 31-H to read 2 as follows: 3 ARTICLE 31-H 4 TAX ON REAL ESTATE TRANSFERS IN THE COUNTY OF MADISON 5 Section 1449-aaaaaa. Definitions. 6 1449-bbbbbb. Imposition of tax. 7 1449-cccccc. Payment of tax. 8 1449-dddddd. Liability for tax. 9 1449-eeeeee. Exemptions. 10 1449-ffffff. Credit. 11 1449-gggggg. Cooperative housing corporation transfers. 12 1449-hhhhhh. Designation of agents. 13 1449-iiiiii. Liability of recording officer. 14 1449-jjjjjj. Refunds. 15 1449-kkkkkk. Deposit and disposition of revenue. 16 1449-llllll. Judicial review. 17 1449-mmmmmm. Apportionment. 18 1449-nnnnnn. Miscellaneous. 19 1449-oooooo. Returns to be secret. 20 1449-pppppp. Foreclosure. 21 § 1449-aaaaaa. Definitions. When used in this article, unless other- 22 wise expressly stated: 23 1. "Person" means an individual, partnership, society, association, 24 joint stock company, corporation, estate, receiver, trustee, assignee, 25 referee or any other person acting in a fiduciary or representative EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD13350-01-1A. 8334 2 1 capacity, whether appointed by a court or otherwise, any combination of 2 individuals, and any other form of unincorporated enterprise owned or 3 conducted by two or more persons. 4 2. "Controlling interest" means (a) in the case of a corporation, 5 either fifty percent or more of the total combined voting power of all 6 classes of stock of such corporation, or fifty percent or more of the 7 capital, profits or beneficial interest in such voting stock of such 8 corporation, and (b) in the case of a partnership, association, trust or 9 other entity, fifty percent or more of the capital, profits or benefi- 10 cial interest in such partnership, association, trust or other entity. 11 3. "Real property" means every estate or right, legal or equitable, 12 present or future, vested or contingent, in lands, tenements or heredi- 13 taments, including buildings, structures and other improvements thereon, 14 which are located in whole or in part within the county of Madison. It 15 shall not include rights to sepulture. 16 4. "Consideration" means the price actually paid or required to be 17 paid for the real property or interest therein, including payment for an 18 option or contract to purchase real property, whether or not expressed 19 in the deed and whether paid or required to be paid by money, property, 20 or any other thing of value. It shall include the cancellation or 21 discharge of an indebtedness or obligation. It shall also include the 22 amount of any mortgage, purchase money mortgage, lien or other encum- 23 brance, whether or not the underlying indebtedness is assumed or taken 24 subject to. 25 (a) In the case of a creation of a leasehold interest or the granting 26 of an option with use and occupancy of real property, consideration 27 shall include, but not be limited to, the value of the rental and other 28 payments attributable to the use and occupancy of the real property or 29 interest therein, the value of any amount paid for an option to purchase 30 or renew and the value of rental or other payments attributable to the 31 exercise of any option to renew. 32 (b) In the case of a creation of a subleasehold interest, consider- 33 ation shall include, but not be limited to, the value of the sublease 34 rental payments attributable to the use and occupancy of the real prop- 35 erty, the value of any amount paid for an option to renew and the value 36 of rental or other payments attributable to the exercise of any option 37 to renew less the value of the remaining prime lease rental payments 38 required to be made. 39 (c) In the case of a controlling interest in any entity that owns real 40 property, consideration shall mean the fair market value of the real 41 property or interest therein, apportioned based on the percentage of the 42 ownership interest transferred or acquired in the entity. 43 (d) In the case of an assignment or surrender of a leasehold interest 44 or the assignment or surrender of an option or contract to purchase real 45 property, consideration shall not include the value of the remaining 46 rental payments required to be made pursuant to the terms of such lease 47 or the amount to be paid for the real property pursuant to the terms of 48 the option or contract being assigned or surrendered. 49 (e) In the case of (1) the original conveyance of shares of stock in a 50 cooperative housing corporation in connection with the grant or transfer 51 of a proprietary leasehold by the cooperative corporation or cooperative 52 plan sponsor and (2) the subsequent conveyance by the owner thereof of 53 such stock in a cooperative housing corporation in connection with the 54 grant or transfer of a proprietary leasehold for a cooperative unit 55 other than an individual residential unit, consideration shall include a 56 proportionate share of the unpaid principal of any mortgage on the realA. 8334 3 1 property of the cooperative housing corporation comprising the cooper- 2 ative dwelling or dwellings. Such share shall be determined by multiply- 3 ing the total unpaid principal of the mortgage by a fraction, the numer- 4 ator of which shall be the number of shares of stock being conveyed in 5 the cooperative housing corporation in connection with the grant or 6 transfer of a proprietary leasehold and the denominator of which shall 7 be the total number of shares of stock in the cooperative housing corpo- 8 ration. 9 5. "Conveyance" means the transfer or transfers of any interest in 10 real property by any method, including but not limited to, sale, 11 exchange, assignment, surrender, mortgage foreclosure, transfer in lieu 12 of foreclosure, option, trust indenture, taking by eminent domain, 13 conveyance upon liquidation or by a receiver, or transfer or acquisition 14 of a controlling interest in any entity with an interest in real proper- 15 ty. Transfer of an interest in real property shall include the creation 16 of a leasehold or sublease only where (a) the sum of the term of the 17 lease or sublease and any options for renewal exceeds forty-nine years, 18 (b) substantial capital improvements are or may be made by or for the 19 benefit of the lessee or sublessee, and (c) the lease or sublease is for 20 substantially all of the premises constituting the real property. 21 Notwithstanding the foregoing, conveyance of real property shall not 22 include the creation, modification, extension, spreading, severance, 23 consolidation, assignment, transfer, release or satisfaction of a mort- 24 gage; a mortgage subordination agreement, a mortgage severance agree- 25 ment, an instrument given to perfect or correct a recorded mortgage; or 26 a release of lien of tax pursuant to this chapter or the internal reven- 27 ue code. 28 6. "Interest in the real property" includes title in fee, a leasehold 29 interest, a beneficial interest, an encumbrance, development rights, air 30 space and air rights, or any other interest with the right to use or 31 occupancy of real property or the right to receive rents, profits or 32 other income derived from real property. It shall also include an option 33 or contract to purchase real property. It shall not include a right of 34 first refusal to purchase real property. 35 7. "Grantor" means the person making the conveyance of real property 36 or interest therein. Where the conveyance consists of a transfer or an 37 acquisition of a controlling interest in an entity with an interest in 38 real property, "grantor" means the entity with an interest in real prop- 39 erty or a shareholder or partner transferring stock or partnership 40 interest. 41 8. "Grantee" means the person who obtains real property or interest 42 therein as a result of a conveyance. 43 9. "Recording officer" means the county clerk of the county of Madi- 44 son. 45 10. "Treasurer" means the chief fiscal officer of the county of Madi- 46 son. 47 § 1449-bbbbbb. Imposition of tax. Notwithstanding any other provisions 48 of law to the contrary, the county of Madison, acting through its local 49 legislative body, is hereby authorized and empowered to adopt and amend 50 local laws imposing in such county a tax on each conveyance of real 51 property or interest therein when the consideration exceeds five hundred 52 dollars, at the rate of two dollars for each five hundred dollars or 53 fractional part thereof. Such local law may apply to any conveyance 54 occurring on or after the date designated by such legislative body, but 55 shall not apply to conveyances made on or after such date pursuant to 56 binding written contracts entered into prior to such date, provided thatA. 8334 4 1 the date of execution of such contract is confirmed by independent 2 evidence such as the recording of the contract, payment of a deposit or 3 other facts and circumstances as determined by the treasurer. 4 § 1449-cccccc. Payment of tax. 1. The real estate transfer tax imposed 5 pursuant to this article shall be paid to the treasurer or the recording 6 officer acting as the agent of the treasurer. Such tax shall be paid at 7 the same time as the real estate transfer tax imposed by article thir- 8 ty-one of this chapter is required to be paid. Such treasurer or record- 9 ing officer shall endorse upon each deed or instrument effecting a 10 conveyance a receipt for the amount of the tax so paid. 11 2. A return shall be required to be filed with such treasurer or 12 recording officer for purposes of the real estate transfer tax imposed 13 pursuant to this article at the same time as a return is required to be 14 filed for purposes of the real estate transfer tax imposed by article 15 thirty-one of this chapter. The return, for purposes of the real estate 16 transfer tax imposed pursuant to this article, shall be a photocopy or 17 carbon copy of the real estate transfer tax return required to be filed 18 pursuant to section fourteen hundred nine of this chapter. However, when 19 an apportionment is required to be made pursuant to section fourteen 20 hundred forty-nine-mmmmmm of this article, a supplemental form shall 21 also be required to be filed. The real estate transfer tax returns and 22 supplemental forms required to be filed pursuant to this section shall 23 be preserved for three years and thereafter until such treasurer or 24 recording officer orders them to be destroyed. 25 3. The recording officer shall not record an instrument effecting a 26 conveyance unless the return required by this section has been filed and 27 the tax imposed pursuant to this article shall have been paid as 28 provided in this section. 29 § 1449-dddddd. Liability for tax. 1. The real estate transfer tax 30 shall be paid by the grantor. If the grantor has failed to pay the tax 31 imposed pursuant to this article or if the grantor is exempt from such 32 tax, the grantee shall have the duty to pay the tax. Where the grantee 33 has the duty to pay the tax because the grantor has failed to pay, such 34 tax shall be the joint and several liability of the grantor and the 35 grantee. 36 2. For the purpose of the proper administration of this article and to 37 prevent evasion of the tax hereby authorized, it shall be presumed that 38 all conveyances are taxable. Where the consideration includes property 39 other than money, it shall be presumed that the consideration is the 40 fair market value of the real property or interest therein. These 41 presumptions shall prevail until the contrary is proven, and the burden 42 of proving the contrary shall be on the person liable for payment of the 43 tax. 44 § 1449-eeeeee. Exemptions. 1. The following shall be exempt from 45 payment of the real estate transfer tax: 46 (a) The state of New York, or any of its agencies, instrumentalities, 47 political subdivisions, or public corporations (including a public 48 corporation created pursuant to agreement or compact with another state 49 or the Dominion of Canada). 50 (b) The United Nations, the United States of America and any of its 51 agencies and instrumentalities. 52 The exemption of such governmental bodies or persons shall not, howev- 53 er, relieve a grantee from the liability for the tax. 54 2. The tax shall not apply to any of the following conveyances: 55 (a) Conveyances to the United Nations, the United States of America, 56 the state of New York, or any of their instrumentalities, agencies orA. 8334 5 1 political subdivisions (or any public corporation, including a public 2 corporation created pursuant to agreement or compact with another state 3 or the Dominion of Canada); 4 (b) Conveyances which are or were used to secure a debt or other obli- 5 gation; 6 (c) Conveyances which, without additional consideration, confirm, 7 correct, modify or supplement a prior conveyance; 8 (d) Conveyances of real property without consideration and otherwise 9 than in connection with a sale, including conveyances conveying realty 10 as bona fide gifts; 11 (e) Conveyances given in connection with a tax sale; 12 (f) Conveyances to effectuate a mere change of identity or form of 13 ownership or organization where there is no change in beneficial owner- 14 ship, other than conveyances to a cooperative housing corporation of the 15 real property comprising the cooperative dwelling or dwellings; 16 (g) Conveyances which consist of a deed of partition; 17 (h) Conveyances given pursuant to the federal bankruptcy act; 18 (i) Conveyances of real property which consist of the execution of a 19 contract to sell real property without the use or occupancy of such 20 property or the granting of an option to purchase real property without 21 the use or occupancy of such property; and 22 (j) Conveyances of an option or contract to purchase real property 23 with the use or occupancy of such property where the consideration is 24 less than two hundred thousand dollars and such property was used solely 25 by the grantor as his or her personal residence and consists of a one, 26 two or three-family house, an individual residential condominium unit or 27 the sale of stock in a cooperative housing corporation in connection 28 with the grant or transfer of a proprietary leasehold covering an indi- 29 vidual residential cooperative unit. 30 § 1449-ffffff. Credit. A grantor shall be allowed a credit against the 31 tax due on a conveyance of real property to the extent tax was paid by 32 such grantor on a prior creation of a leasehold of all or a portion of 33 the same real property or on the granting of an option or contract to 34 purchase all or a portion of the same real property, by such grantor. 35 Such credit shall be computed by multiplying the tax paid on the 36 creation of the leasehold or on the granting of the option or contract 37 by a fraction, the numerator of which is the value of the consideration 38 used to compute such tax paid which is not yet due to such grantor on 39 the date of the subsequent conveyance (and which such grantor will not 40 be entitled to receive after such date), and the denominator of which is 41 the total value of the consideration used to compute such tax paid. 42 § 1449-gggggg. Cooperative housing corporation transfers. 1. Notwith- 43 standing the definition of "controlling interest" contained in subdivi- 44 sion two of section fourteen hundred forty-nine-aaaaaa of this article 45 or anything to the contrary contained in subdivision five of section 46 fourteen hundred forty-nine-aaaaaa of this article, the tax imposed 47 pursuant to this article shall apply to (a) the original conveyance of 48 shares of stock in a cooperative housing corporation in connection with 49 the grant or transfer of a proprietary leasehold by the cooperative 50 corporation or cooperative plan sponsor, and (b) the subsequent convey- 51 ance of such stock in a cooperative housing corporation in connection 52 with the grant or transfer of a proprietary leasehold by the owner ther- 53 eof. With respect to any such subsequent conveyance where the property 54 is an individual residential unit, the consideration for the interest 55 conveyed shall exclude the value of any liens on certificates of stock 56 or other evidences of an ownership interest in and a proprietary leaseA. 8334 6 1 from a corporation or partnership formed for the purpose of cooperative 2 ownership of residential interest in real estate remaining thereon at 3 the time of conveyance. In determining the tax on a conveyance described 4 in paragraph (a) of this subdivision, a credit shall be allowed for a 5 proportionate part of the amount of any tax paid upon the conveyance to 6 the cooperative housing corporation of the real property comprising the 7 cooperative dwelling or dwellings to the extent that such conveyance 8 effectuated a mere change of identity or form of ownership of such prop- 9 erty and not a change in the beneficial ownership of such property. The 10 amount of the credit shall be determined by multiplying the amount of 11 tax paid upon the conveyance to the cooperative housing corporation by a 12 percentage representing the extent to which such conveyance effectuated 13 a mere change of identity or form of ownership and not a change in the 14 beneficial ownership of such property, and then multiplying the result- 15 ing product by a fraction, the numerator of which shall be the number of 16 shares of stock conveyed in a transaction described in paragraph (a) of 17 this subdivision and the denominator of which shall be the total number 18 of shares of stock of the cooperative housing corporation (including any 19 stock held by the corporation). In no event, however, shall such credit 20 reduce the tax, on a conveyance described in paragraph (a) of this 21 subdivision, below zero, nor shall any such credit be allowed for a tax 22 paid more than twenty-four months prior to the date on which occurs the 23 first in a series of conveyances of shares of stock in an offering of 24 cooperative housing corporation shares described in paragraph (a) of 25 this subdivision. 26 2. Every cooperative housing corporation shall be required to file an 27 information return with the treasurer by July fifteenth of each year 28 covering the preceding period of January first through June thirtieth 29 and by January fifteenth of each year covering the preceding period of 30 July first through December thirty-first. The return shall contain such 31 information regarding the conveyance of shares of stock in the cooper- 32 ative housing corporation as the treasurer may deem necessary, includ- 33 ing, but not limited to, the names, addresses and employee identifica- 34 tion numbers or social security numbers of the grantor and the grantee, 35 the number of shares conveyed, the date of the conveyance and the 36 consideration paid for such conveyance. 37 § 1449-hhhhhh. Designation of agents. The treasurer is authorized to 38 designate the recording officer to act as its agent for purposes of 39 collecting the tax authorized by this article. The treasurer shall 40 provide for the manner in which such person may be designated as its 41 agent subject to such terms and conditions as it shall prescribe. The 42 real estate transfer tax shall be paid to such agent as provided in 43 section fourteen hundred forty-nine-cccccc of this article. 44 § 1449-iiiiii. Liability of recording officer. A recording officer 45 shall not be liable for any inaccuracy in the amount of tax imposed 46 pursuant to this article that he or she shall collect so long as he or 47 she shall compute and collect such tax on the amount of consideration or 48 the value of the interest conveyed as such amounts are provided to him 49 or her by the person paying the tax. 50 § 1449-jjjjjj. Refunds. Whenever the treasurer shall determine that 51 any moneys received under the provisions of the local law enacted pursu- 52 ant to this article were paid in error, it may cause such moneys to be 53 refunded pursuant to such rules and regulations it may prescribe, 54 provided any application for such refund is filed with the treasurer 55 within two years from the date the erroneous payment was made. When 56 making any findings or determinations the treasurer may rely upon anyA. 8334 7 1 findings or determinations of the commissioner and any rules and regu- 2 lations promulgated pursuant to article thirty-one of this chapter. 3 § 1449-kkkkkk. Deposit and disposition of revenue. All taxes collected 4 or received by the treasurer or his or her duly authorized agent under 5 the provisions of the local law enacted pursuant to this article shall 6 be deposited in accordance with provisions of a local law adopted by the 7 legislative body of the county of Madison which local law shall desig- 8 nate proper officers to be responsible for deposit of revenue collected 9 or received under this article. Such local law shall also provide that 10 any officer designated to collect, receive, or deposit such revenue 11 shall maintain a system of accounts showing the revenue collected or 12 received from the tax imposed pursuant to this article. Such local law 13 shall also provide that all revenue derived from the imposition of such 14 tax shall be deposited into the general fund of the county of Madison 15 and shall be used for purposes deemed appropriate by the legislative 16 body of the county of Madison. 17 § 1449-llllll. Judicial review. 1. Any final determination of the 18 amount of any tax payable under section fourteen hundred forty-nine- 19 cccccc of this article shall be reviewable for error, illegality or 20 unconstitutionality or any other reason whatsoever by a proceeding under 21 article seventy-eight of the civil practice law and rules if application 22 therefor is made to the supreme court within four months after the 23 giving of the notice of such final determination, provided, however, 24 that any such proceeding under article seventy-eight of the civil prac- 25 tice law and rules shall not be instituted unless (a) the amount of any 26 tax sought to be reviewed, with such interest and penalties thereon as 27 may be provided for by local law shall be first deposited and there is 28 filed an undertaking, issued by a surety company authorized to transact 29 business in this state and approved by the superintendent of financial 30 services of this state as to solvency and responsibility, in such amount 31 as a justice of the supreme court shall approve to the effect that if 32 such proceeding be dismissed or the tax confirmed the petitioner will 33 pay all costs and charges which may accrue in the prosecution of such 34 proceeding or (b) at the option of the petitioner, such undertaking may 35 be in a sum sufficient to cover the taxes, interest and penalties stated 36 in such determination, plus the costs and charges which may accrue 37 against it in the prosecution of the proceeding, in which event the 38 petitioner shall not be required to pay such taxes, interest or penal- 39 ties as a condition precedent to the application. 40 2. Where any tax imposed hereunder shall have been erroneously, ille- 41 gally or unconstitutionally assessed or collected and application for 42 the refund or revision thereof duly made to the proper fiscal officer or 43 officers, and such officer or officers shall have made a determination 44 denying such refund or revision, such determination shall be reviewable 45 by a proceeding under article seventy-eight of the civil practice law 46 and rules; provided, however, that (a) such proceeding is instituted 47 within four months after the giving of the notice of such denial, (b) a 48 final determination of tax due was not previously made, and (c) an 49 undertaking is filed with the proper fiscal officer or officers in such 50 amount and with such sureties as a justice of the supreme court shall 51 approve to the effect that if such proceeding be dismissed or the tax 52 confirmed, the petitioner will pay all costs and charges which may 53 accrue in the prosecution of such proceeding. 54 3. In any proceedings instituted pursuant to this article the rules 55 and regulations of the commissioner shall be applied where applicable.A. 8334 8 1 § 1449-mmmmmm. Apportionment. The local law adopted by the legislative 2 body of the county of Madison shall provide for a method of apportion- 3 ment for determining the amount of tax due whenever the real property or 4 interest therein is situated within and without the county of Madison. 5 § 1449-nnnnnn. Miscellaneous. The local law adopted by the legislative 6 body of the county of Madison may contain such other provisions as such 7 legislative body deems necessary for the proper administration of the 8 tax imposed pursuant to this article, including provisions concerning 9 the determination of tax, the imposition of interest on underpayments 10 and overpayments and the imposition of civil penalties. Such provisions 11 shall be identical to the corresponding provisions of the real estate 12 transfer tax imposed by article thirty-one of this chapter, so far as 13 such provisions can be made applicable to the tax imposed pursuant to 14 this article. 15 § 1449-oooooo. Returns to be secret. 1. Except in accordance with 16 proper judicial order or as otherwise provided by law, it shall be 17 unlawful for the treasurer or any officer or employee of the county of 18 Madison or any person engaged or retained by such county on an independ- 19 ent contract basis to divulge or make known in any manner the partic- 20 ulars set forth or disclosed in any return required under a local law 21 enacted pursuant to this article. However, that nothing in this section 22 shall prohibit the recording officer from making a notation on an 23 instrument effecting a conveyance indicating the amount of tax paid. No 24 recorded instrument effecting a conveyance shall be considered a return 25 for purposes of this section. 26 2. The officers charged with the custody of such returns shall not be 27 required to produce any of them or evidence of anything contained in 28 them in any action or proceeding in any court, except on behalf of the 29 county in any action or proceeding involving the collection of a tax due 30 under a local law enacted pursuant to this article to which such county 31 or an officer or employee of such county is a party or a claimant, or on 32 behalf of any party to any action or proceeding under the provisions of 33 a local law enacted pursuant to this article when the returns or facts 34 shown thereby are directly involved in such action or proceeding, in any 35 of which events the court may require the production of, and may admit 36 in evidence, so much of said returns or of the facts shown thereby, as 37 are pertinent to the action or proceeding and no more. 38 3. Nothing herein shall be construed to prohibit the delivery to a 39 grantor or grantee of an instrument effecting a conveyance or the duly 40 authorized representative of a grantor or grantee of a certified copy of 41 any return filed in connection with such instrument or to prohibit the 42 publication of statistics so classified as to prevent the identification 43 of particular returns and the items thereof, or the inspection by the 44 legal representatives of such county of the return of any taxpayer who 45 shall bring action to set aside or review the tax based thereon. 46 4. Any officer or employee of such county who willfully violates the 47 provisions of this section shall be dismissed from office and be incapa- 48 ble of holding any public office in this state for a period of five 49 years thereafter. 50 § 1449-pppppp. Foreclosure. Where the conveyance consists of a trans- 51 fer of property made as a result of an order of the court in a foreclo- 52 sure proceeding ordering the sale of such property, the referee or sher- 53 iff effectuating such transfer shall not be liable for any interest or 54 penalties that are authorized pursuant to this article or article thir- 55 ty-seven of this chapter. 56 § 2. This act shall take effect immediately.
