Bill Text: NY S06232 | 2019-2020 | General Assembly | Introduced
Bill Title: Authorizes the county of Onondaga to impose a tax of three dollars per thousand dollars on real estate transfers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S06232 Detail]
Download: New_York-2019-S06232-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6232 2019-2020 Regular Sessions IN SENATE May 24, 2019 ___________ Introduced by Sen. MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to authorizing the county of Onondaga to impose a tax on real estate transfers; and providing for the repeal of such provisions upon expiration thereof 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 5 IN THE COUNTY OF ONONDAGA 6 Section 1449-aaaaaa. Definitions. 7 1449-bbbbbb. Imposition of tax. 8 1449-cccccc. Payment of tax. 9 1449-dddddd. Liability for tax. 10 1449-eeeeee. Exemptions. 11 1449-ffffff. Credit. 12 1449-gggggg. Cooperative housing corporation transfers. 13 1449-hhhhhh. Designation of agents. 14 1449-iiiiii. Liability of recording officer. 15 1449-jjjjjj. Refunds. 16 1449-kkkkkk. Deposit and disposition of revenue. 17 1449-llllll. Judicial review. 18 1449-mmmmmm. Apportionment. 19 1449-nnnnnn. Miscellaneous. 20 1449-oooooo. Returns to be secret. 21 1449-pppppp. Foreclosure. 22 § 1449-aaaaaa. Definitions. When used in this article, unless other- 23 wise expressly stated: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD11277-07-9S. 6232 2 1 1. "Person" means an individual, partnership, society, association, 2 joint stock company, corporation, estate, receiver, trustee, assignee, 3 referee or any other person acting in a fiduciary or representative 4 capacity, whether appointed by a court or otherwise, any combination of 5 individuals, and any other form of unincorporated enterprise owned or 6 conducted by two or more persons. 7 2. "Controlling interest" means (a) in the case of a corporation, 8 either fifty percent or more of the total combined voting power of all 9 classes of stock of such corporation, or fifty percent or more of the 10 capital, profits or beneficial interest in such voting stock of such 11 corporation, and (b) in the case of a partnership, association, trust or 12 other entity, fifty percent or more of the capital, profits or benefi- 13 cial interest in such partnership, association, trust or other entity. 14 3. "Real property" means every estate or right, legal or equitable, 15 present or future, vested or contingent, in lands, tenements or heredi- 16 taments, including buildings, structures and other improvements thereon, 17 which are located in whole or in part within the county of Onondaga. It 18 shall not include rights to sepulture. 19 4. "Consideration" means the price actually paid or required to be 20 paid for the real property or interest therein, including payment for an 21 option or contract to purchase real property, whether or not expressed 22 in the deed and whether paid or required to be paid by money, property, 23 or any other thing of value. It shall include the cancellation or 24 discharge of an indebtedness or obligation. It shall also include the 25 amount of any mortgage, purchase money mortgage, lien or other encum- 26 brance, whether or not the underlying indebtedness is assumed or taken 27 subject to. 28 (a) In the case of a creation of a leasehold interest or the granting 29 of an option with use and occupancy of real property, consideration 30 shall include, but not be limited to, the value of the rental and other 31 payments attributable to the use and occupancy of the real property or 32 interest therein, the value of any amount paid for an option to purchase 33 or renew and the value of rental or other payments attributable to the 34 exercise of any option to renew. 35 (b) In the case of a creation of a subleasehold interest, consider- 36 ation shall include, but not be limited to, the value of the sublease 37 rental payments attributable to the use and occupancy of the real prop- 38 erty, the value of any amount paid for an option to renew and the value 39 of rental or other payments attributable to the exercise of any option 40 to renew less the value of the remaining prime lease rental payments 41 required to be made. 42 (c) In the case of a controlling interest in any entity that owns real 43 property, consideration shall mean the fair market value of the real 44 property or interest therein, apportioned based on the percentage of the 45 ownership interest transferred or acquired in the entity. 46 (d) In the case of an assignment or surrender of a leasehold interest 47 or the assignment or surrender of an option or contract to purchase real 48 property, consideration shall not include the value of the remaining 49 rental payments required to be made pursuant to the terms of such lease 50 or the amount to be paid for the real property pursuant to the terms of 51 the option or contract being assigned or surrendered. 52 (e) In the case of (1) the original conveyance of shares of stock in a 53 cooperative housing corporation in connection with the grant or transfer 54 of a proprietary leasehold by the cooperative corporation or cooperative 55 plan sponsor and (2) the subsequent conveyance by the owner thereof of 56 such stock in a cooperative housing corporation in connection with theS. 6232 3 1 grant or transfer of a proprietary leasehold for a cooperative unit 2 other than an individual residential unit, consideration shall include a 3 proportionate share of the unpaid principal of any mortgage on the real 4 property of the cooperative housing corporation comprising the cooper- 5 ative dwelling or dwellings. Such share shall be determined by multiply- 6 ing the total unpaid principal of the mortgage by a fraction, the numer- 7 ator of which shall be the number of shares of stock being conveyed in 8 the cooperative housing corporation in connection with the grant or 9 transfer of a proprietary leasehold and the denominator of which shall 10 be the total number of shares of stock in the cooperative housing corpo- 11 ration. 12 5. "Conveyance" means the transfer or transfers of any interest in 13 real property by any method, including but not limited to, sale, 14 exchange, assignment, surrender, mortgage foreclosure, transfer in lieu 15 of foreclosure, option, trust indenture, taking by eminent domain, 16 conveyance upon liquidation or by a receiver, or transfer or acquisition 17 of a controlling interest in any entity with an interest in real proper- 18 ty. Transfer of an interest in real property shall include the creation 19 of a leasehold or sublease only where (a) the sum of the term of the 20 lease or sublease and any options for renewal exceeds forty-nine years, 21 (b) substantial capital improvements are or may be made by or for the 22 benefit of the lessee or sublessee, and (c) the lease or sublease is for 23 substantially all of the premises constituting the real property. 24 Notwithstanding the foregoing, conveyance of real property shall not 25 include the creation, modification, extension, spreading, severance, 26 consolidation, assignment, transfer, release or satisfaction of a mort- 27 gage; a mortgage subordination agreement, a mortgage severance agree- 28 ment, an instrument given to perfect or correct a recorded mortgage; or 29 a release of lien of tax pursuant to this chapter or the internal reven- 30 ue code. 31 6. "Interest in the real property" includes title in fee, a leasehold 32 interest, a beneficial interest, an encumbrance, development rights, air 33 space and air rights, or any other interest with the right to use or 34 occupancy of real property or the right to receive rents, profits or 35 other income derived from real property. It shall also include an option 36 or contract to purchase real property. It shall not include a right of 37 first refusal to purchase real property. 38 7. "Grantor" means the person making the conveyance of real property 39 or interest therein. Where the conveyance consists of a transfer or an 40 acquisition of a controlling interest in an entity with an interest in 41 real property, "grantor" means the entity with an interest in real prop- 42 erty or a shareholder or partner transferring stock or partnership 43 interest. 44 8. "Grantee" means the person who obtains real property or interest 45 therein as a result of a conveyance. 46 9. "Recording officer" means the county clerk of the county of Ononda- 47 ga. 48 10. "Treasurer" means the chief fiscal officer of the county of Onon- 49 daga. 50 § 1449-bbbbbb. Imposition of tax. Notwithstanding any other provisions 51 of law to the contrary, the county of Onondaga, acting through its local 52 legislative body, is hereby authorized and empowered to adopt and amend 53 local laws imposing in such county a tax on each conveyance of real 54 property or interest therein when the consideration exceeds one thousand 55 dollars, at the rate of three dollars for each one thousand dollars or 56 fractional part thereof. Such local law may apply to any conveyanceS. 6232 4 1 occurring on or after the date designated by such legislative body, but 2 shall not apply to conveyances made on or after such date pursuant to 3 binding written contracts entered into prior to such date, provided that 4 the date of execution of such contract is confirmed by independent 5 evidence such as the recording of the contract, payment of a deposit or 6 other facts and circumstances as determined by the treasurer. 7 § 1449-cccccc. Payment of tax. 1. The real estate transfer tax imposed 8 pursuant to this article shall be paid to the treasurer or the recording 9 officer acting as the agent of the treasurer. Such tax shall be paid at 10 the same time as the real estate transfer tax imposed by article thir- 11 ty-one of this chapter is required to be paid. Such treasurer or record- 12 ing officer shall endorse upon each deed or instrument effecting a 13 conveyance a receipt for the amount of the tax so paid. 14 2. A return shall be required to be filed with such treasurer or 15 recording officer for purposes of the real estate transfer tax imposed 16 pursuant to this article at the same time as a return is required to be 17 filed for purposes of the real estate transfer tax imposed by article 18 thirty-one of this chapter. The return, for purposes of the real estate 19 transfer tax imposed pursuant to this article, shall be a photocopy or 20 carbon copy of the real estate transfer tax return required to be filed 21 pursuant to section fourteen hundred nine of this chapter. However, 22 when an apportionment is required to be made pursuant to section four- 23 teen hundred forty-nine-mmmmmm of this article, a supplemental form 24 shall also be required to be filed. The real estate transfer tax returns 25 and supplemental forms required to be filed pursuant to this section 26 shall be preserved for three years and thereafter until such treasurer 27 or recording officer orders them to be destroyed. 28 3. The recording officer shall not record an instrument effecting a 29 conveyance unless the return required by this section has been filed and 30 the tax imposed pursuant to this article shall have been paid as 31 provided in this section. 32 § 1449-dddddd. Liability for tax. 1. The real estate transfer tax 33 shall be paid by the grantor. If the grantor has failed to pay the tax 34 imposed pursuant to this article or if the grantor is exempt from such 35 tax, the grantee shall have the duty to pay the tax. Where the grantee 36 has the duty to pay the tax because the grantor has failed to pay, such 37 tax shall be the joint and several liability of the grantor and the 38 grantee. 39 2. For the purpose of the proper administration of this article and to 40 prevent evasion of the tax hereby authorized, it shall be presumed that 41 all conveyances are taxable. Where the consideration includes property 42 other than money, it shall be presumed that the consideration is the 43 fair market value of the real property or interest therein. These 44 presumptions shall prevail until the contrary is proven, and the burden 45 of proving the contrary shall be on the person liable for payment of the 46 tax. 47 § 1449-eeeeee. Exemptions. 1. The following shall be exempt from 48 payment of the real estate transfer tax: 49 (a) The state of New York, or any of its agencies, instrumentalities, 50 political subdivisions, or public corporations (including a public 51 corporation created pursuant to agreement or compact with another state 52 or the Dominion of Canada). 53 (b) The United Nations, the United States of America and any of its 54 agencies and instrumentalities. 55 The exemption of such governmental bodies or persons shall not, howev- 56 er, relieve a grantee from them of liability for the tax.S. 6232 5 1 2. The tax shall not apply to any of the following conveyances: 2 (a) Conveyances to the United Nations, the United States of America, 3 the state of New York, or any of their instrumentalities, agencies or 4 political subdivisions (or any public corporation, including a public 5 corporation created pursuant to agreement or compact with another state 6 or the Dominion of Canada); 7 (b) Conveyances which are or were used to secure a debt or other obli- 8 gation; 9 (c) Conveyances which, without additional consideration, confirm, 10 correct, modify or supplement a prior conveyance; 11 (d) Conveyances of real property without consideration and otherwise 12 than in connection with a sale, including conveyances conveying realty 13 as bona fide gifts; 14 (e) Conveyances given in connection with a tax sale; 15 (f) Conveyances to effectuate a mere change of identity or form of 16 ownership or organization where there is no change in beneficial owner- 17 ship, other than conveyances to a cooperative housing corporation of the 18 real property comprising the cooperative dwelling or dwellings; 19 (g) Conveyances which consist of a deed of partition; 20 (h) Conveyances given pursuant to the federal bankruptcy act; 21 (i) Conveyances of real property which consist of the execution of a 22 contract to sell real property without the use or occupancy of such 23 property or the granting of an option to purchase real property without 24 the use or occupancy of such property; and 25 (j) Conveyances of an option or contract to purchase real property 26 with the use or occupancy of such property where the consideration is 27 less than two hundred thousand dollars and such property was used solely 28 by the grantor as his personal residence and consists of a one, two or 29 three-family house, an individual residential condominium unit or the 30 sale of stock in a cooperative housing corporation in connection with 31 the grant or transfer of a proprietary leasehold covering an individual 32 residential cooperative unit. 33 § 1449-ffffff. Credit. A grantor shall be allowed a credit against the 34 tax due on a conveyance of real property to the extent tax was paid by 35 such grantor on a prior creation of a leasehold of all or a portion of 36 the same real property or on the granting of an option or contract to 37 purchase all or a portion of the same real property, by such grantor. 38 Such credit shall be computed by multiplying the tax paid on the 39 creation of the leasehold or on the granting of the option or contract 40 by a fraction, the numerator of which is the value of the consideration 41 used to compute such tax paid which is not yet due to such grantor on 42 the date of the subsequent conveyance (and which such grantor will not 43 be entitled to receive after such date), and the denominator of which is 44 the total value of the consideration used to compute such tax paid. 45 § 1449-gggggg. Cooperative housing corporation transfers. 1. Notwith- 46 standing the definition of "controlling interest" contained in subdivi- 47 sion two of section fourteen hundred forty-nine-aaaaaa of this article 48 or anything to the contrary contained in subdivision five of section 49 fourteen hundred forty-nine-aaaaaa of this article, the tax imposed 50 pursuant to this article shall apply to (a) the original conveyance of 51 shares of stock in a cooperative housing corporation in connection with 52 the grant or transfer of a proprietary leasehold by the cooperative 53 corporation or cooperative plan sponsor, and (b) the subsequent convey- 54 ance of such stock in a cooperative housing corporation in connection 55 with the grant or transfer of a proprietary leasehold by the owner ther- 56 eof. With respect to any such subsequent conveyance where the propertyS. 6232 6 1 is an individual residential unit, the consideration for the interest 2 conveyed shall exclude the value of any liens on certificates of stock 3 or other evidences of an ownership interest in and a proprietary lease 4 from a corporation or partnership formed for the purpose of cooperative 5 ownership of residential interest in real estate remaining thereon at 6 the time of conveyance. In determining the tax on a conveyance described 7 in paragraph (a) of this subdivision, a credit shall be allowed for a 8 proportionate part of the amount of any tax paid upon the conveyance to 9 the cooperative housing corporation of the real property comprising the 10 cooperative dwelling or dwellings to the extent that such conveyance 11 effectuated a mere change of identity or form of ownership of such prop- 12 erty and not a change in the beneficial ownership of such property. The 13 amount of the credit shall be determined by multiplying the amount of 14 tax paid upon the conveyance to the cooperative housing corporation by a 15 percentage representing the extent to which such conveyance effectuated 16 a mere change of identity or form of ownership and not a change in the 17 beneficial ownership of such property, and then multiplying the result- 18 ing product by a fraction, the numerator of which shall be the number of 19 shares of stock conveyed in a transaction described in paragraph (a) of 20 this subdivision and the denominator of which shall be the total number 21 of shares of stock of the cooperative housing corporation (including any 22 stock held by the corporation). In no event, however, shall such credit 23 reduce the tax, on a conveyance described in paragraph (a) of this 24 subdivision, below zero, nor shall any such credit be allowed for a tax 25 paid more than twenty-four months prior to the date on which occurs the 26 first in a series of conveyances of shares of stock in an offering of 27 cooperative housing corporation shares described in paragraph (a) of 28 this subdivision. 29 2. Every cooperative housing corporation shall be required to file an 30 information return with the treasurer by July fifteenth of each year 31 covering the preceding period of January first through June thirty-first 32 and by January fifteenth of each year covering the preceding period of 33 July first through December thirty-first. The return shall contain such 34 information regarding the conveyance of shares of stock in the cooper- 35 ative housing corporation as the treasurer may deem necessary, includ- 36 ing, but not limited to, the names, addresses and employee identifica- 37 tion numbers or social security numbers of the grantor and the grantee, 38 the number of shares conveyed, the date of the conveyance and the 39 consideration paid for such conveyance. 40 § 1449-hhhhhh. Designation of agents. The treasurer is authorized to 41 designate the recording officer to act as its agent for purposes of 42 collecting the tax authorized by this article. The treasurer shall 43 provide for the manner in which such person may be designated as its 44 agent subject to such terms and conditions as it shall prescribe. The 45 real estate transfer tax shall be paid to such agent as provided in 46 section fourteen hundred forty-nine-cccccc of this article. 47 § 1449-iiiiii. Liability of recording officer. A recording officer 48 shall not be liable for any inaccuracy in the amount of tax imposed 49 pursuant to this article that he shall collect so long as he shall 50 compute and collect such tax on the amount of consideration or the value 51 of the interest conveyed as such amounts are provided to him or her by 52 the person paying the tax. 53 § 1449-jjjjjj. Refunds. Whenever the treasurer shall determine that 54 any moneys received under the provisions of the local law enacted pursu- 55 ant to this article were paid in error, it may cause such moneys to be 56 refunded pursuant to such rules and regulations it may prescribe,S. 6232 7 1 provided any application for such refund is filed with the treasurer 2 within two years from the date the erroneous payment was made. When 3 making any findings or determinations the treasurer may rely upon any 4 findings or determinations of the commissioner and any rules and regu- 5 lations promulgated pursuant to article thirty-one of this chapter. 6 § 1449-kkkkkk. Deposit and disposition of revenue. All taxes collected 7 or received by the treasurer or his duly authorized agent under the 8 provisions of the local law enacted pursuant to this article shall be 9 deposited in accordance with provisions of a local law adopted by the 10 legislative body of the county of Onondaga which local law shall desig- 11 nate proper officers to be responsible for deposit of revenue collected 12 or received under this article. Such local law shall also provide that 13 any officer designated to collect, receive, or deposit such revenue 14 shall maintain a system of accounts showing the revenue collected or 15 received from the tax imposed pursuant to this article. Such local law 16 shall also provide that all revenue derived from the imposition of such 17 tax shall be deposited into a separate account maintained by the county 18 of Onondaga and shall be distributed as follows: one-third of net 19 collections to the Greater Syracuse Property Development Corporation; 20 one-third of net collections to fund arts and cultural institutions in 21 Onondaga county; and one-third of net collections to road and sewer 22 infrastructure repairs and improvements within Onondaga county and its 23 sewer districts in Onondaga county. 24 § 1449-llllll. Judicial review. 1. Any final determination of the 25 amount of any tax payable under section fourteen hundred forty-nine- 26 cccccc of this article shall be reviewable for error, illegality or 27 unconstitutionality or any other reason whatsoever by a proceeding under 28 article seventy-eight of the civil practice law and rules if application 29 therefor is made to the supreme court within four months after the 30 giving of the notice of such final determination, provided, however, 31 that any such proceeding under article seventy-eight of the civil prac- 32 tice law and rules shall not be instituted unless (a) the amount of any 33 tax sought to be reviewed, with such interest and penalties thereon as 34 may be provided for by local law shall be first deposited and there is 35 filed an undertaking, issued by a surety company authorized to transact 36 business in this state and approved by the superintendent of financial 37 services of this state as to solvency and responsibility, in such amount 38 as a justice of the supreme court shall approve to the effect that if 39 such proceeding be dismissed or the tax confirmed the petitioner will 40 pay all costs and charges which may accrue in the prosecution of such 41 proceeding or (b) at the option of the petitioner, such undertaking may 42 be in a sum sufficient to cover the taxes, interest and penalties stated 43 in such determination, plus the costs and charges which may accrue 44 against it in the prosecution of the proceeding, in which event the 45 petitioner shall not be required to pay such taxes, interest or penal- 46 ties as a condition precedent to the application. 47 2. Where any tax imposed hereunder shall have been erroneously, ille- 48 gally or unconstitutionally assessed or collected and application for 49 the refund or revision thereof duly made to the proper fiscal officer or 50 officers, and such officer or officers shall have made a determination 51 denying such refund or revision, such determination shall be reviewable 52 by a proceeding under article seventy-eight of the civil practice law 53 and rules; provided, however, that (a) such proceeding is instituted 54 within four months after the giving of the notice of such denial, (b) a 55 final determination of tax due was not previously made, and (c) an 56 undertaking is filed with the proper fiscal officer or officers in suchS. 6232 8 1 amount and with such sureties as a justice of the supreme court shall 2 approve to the effect that if such proceeding be dismissed or the tax 3 confirmed, the petitioner will pay all costs and charges which may 4 accrue in the prosecution of such proceeding. 5 3. In any proceedings instituted pursuant to this article the rules 6 and regulations of the commissioner shall be applied where applicable. 7 § 1449-mmmmmm. Apportionment. The local law adopted by the legislative 8 body of the county of Onondaga shall provide for a method of apportion- 9 ment for determining the amount of tax due whenever the real property or 10 interest therein is situated within and without the county of Onondaga. 11 § 1449-nnnnnn. Miscellaneous. The local law adopted by the legislative 12 body of the county of Onondaga may contain such other provisions as such 13 legislative body deems necessary for the proper administration of the 14 tax imposed pursuant to this article, including provisions concerning 15 the determination of tax, the imposition of interest on underpayments 16 and overpayments and the imposition of civil penalties. Such provisions 17 shall be identical to the corresponding provisions of the real estate 18 transfer tax imposed by article thirty-one of this chapter, so far as 19 such provisions can be made applicable to the tax imposed pursuant to 20 this article. 21 § 1449-oooooo. Returns to be secret. 1. Except in accordance with 22 proper judicial order or as otherwise provided by law, it shall be 23 unlawful for the treasurer or any officer or employee of the county of 24 Onondaga or any person engaged or retained by such county on an inde- 25 pendent contract basis to divulge or make known in any manner the 26 particulars set forth or disclosed in any return required under a local 27 law enacted pursuant to this article. However, that nothing in this 28 section shall prohibit the recording officer from making a notation on 29 an instrument effecting a conveyance indicating the amount of tax paid. 30 No recorded instrument effecting a conveyance shall be considered a 31 return for purposes of this section. 32 2. The officers charged with the custody of such returns shall not be 33 required to produce any of them or evidence of anything contained in 34 them in any action or proceeding in any court, except on behalf of the 35 county in any action or proceeding involving the collection of a tax due 36 under a local law enacted pursuant to this article to which such county 37 or an officer or employee of such county is a party or a claimant, or on 38 behalf of any party to any action or proceeding under the provisions of 39 a local law enacted pursuant to this article when the returns or facts 40 shown thereby are directly involved in such action or proceeding, in any 41 of which events the court may require the production of, and may admit 42 in evidence, so much of said returns or of the facts shown thereby, as 43 are pertinent to the action or proceeding and no more. 44 3. Nothing herein shall be construed to prohibit the delivery to a 45 grantor or grantee of an instrument effecting a conveyance or the duly 46 authorized representative of a grantor or grantee of a certified copy of 47 any return filed in connection with such instrument or to prohibit the 48 publication of statistics so classified as to prevent the identification 49 of particular returns and the items thereof, or the inspection by the 50 legal representatives of such county of the return of any taxpayer who 51 shall bring action to set aside or review the tax based thereon. 52 4. Any officer or employee of such county who willfully violates the 53 provisions of this section shall be dismissed from office and be incapa- 54 ble of holding any public office in this state for a period of five 55 years thereafter.S. 6232 9 1 § 1449-pppppp. Foreclosure. Where the conveyance consists of a trans- 2 fer of property made as a result of an order of the court in a foreclo- 3 sure proceeding ordering the sale of such property, the referee or sher- 4 iff effectuating such transfer shall not be liable for any interest or 5 penalties that are authorized pursuant to this article or article thir- 6 ty-seven of this chapter. 7 § 2. This act shall take effect immediately and shall expire and be 8 deemed repealed seven years after such date.
