N.Y. Tax Law 171-W – State support for the local enforcement of past-due property taxes
§ 171-w. State support for the local enforcement of past-due property taxes. 1. Legislative findings. The legislature finds that local governments have limited means to enforce the collection of past-due property taxes. The legislature further finds that it is appropriate for the state to support the local enforcement of past-due property taxes by authorizing the commissioner to administer a program to disallow STAR credits and exemptions to delinquent property owners based on information reported to him or her by municipal officials.
Terms Used In N.Y. Tax Law 171-W
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
2. Definitions. For the purposes of this section:
(a) "Delinquent property owner" means a STAR recipient whose primary residence is subject to past-due property taxes.
(b) "Past-due property taxes" means property taxes that have been levied upon a property owner's primary residence that remain unpaid one year after the last date on which they could have been paid without interest, or where such taxes are payable in installments, those taxes that remain unpaid one year after the last date on which the final installment could have been paid without interest.
(c) "STAR credit" means the basic STAR personal income tax credit authorized by subsection (eee) of section six hundred six of this chapter.
(d) "STAR exemption" means the basic STAR exemption from real property taxation authorized by § 425 of the real property tax law.
(e) "STAR recipient" means a property owner who is registered to receive the STAR credit in relation to his or her primary residence, or whose primary residence is receiving the STAR exemption.
3. STAR tax payment requirement; generally. Notwithstanding any provision of law to the contrary, a property owner whose primary residence is subject to past-due property taxes shall not be allowed to receive a STAR credit or STAR exemption unless the past-due property taxes are paid in full on or before a date specified by the commissioner.
4. Commissioner's authority. The commissioner is hereby authorized to develop a program to support the local enforcement of past-due property taxes by disallowing STAR credits and STAR exemptions to delinquent property owners. The commissioner shall establish procedures for the administration of this program, which shall include the following provisions:
(a) The procedures by which municipal officials shall report past-due property taxes and property tax payments to the department.
(b) The procedures by which the department shall notify delinquent property owners of the impending disallowance of their STAR credits or exemptions due to past-due property taxes.
(c) The date by which delinquent property owners must pay their past-due property taxes in full in order to avoid disallowance of their STAR credits or exemptions.
(d) The procedures by which the commissioner shall disallow STAR credits and notify assessors of the disallowance of STAR exemptions if past-due property taxes are not paid in full by the specified date.
(e) Such other procedures as the commissioner shall deem necessary to carry out the provisions of this section.
5. Municipal reports. The commissioner's procedures regarding municipal reporting shall be subject to the following provisions:
(a) The commissioner may request and shall be entitled to receive from any municipal corporation of the state, or any agency or official thereof, such data as the commissioner deems necessary to effectuate the purposes of this section. Such information shall be submitted to the department at such time and in such manner as the commissioner may direct.
(b) In lieu of requiring municipal officials to submit their reports directly to the department, the commissioner may, in his or her discretion, require that such reports be submitted to the county director of real property tax services, who shall integrate the reports into a single file and submit it to the department at such time and in such manner as the commissioner may direct. Provided, that where the commissioner institutes such a procedure, he or she may exclude cities with one hundred twenty-five thousand inhabitants or more, so that information about past-due property taxes and property tax payments in such a city shall be reported directly to the department by a designated city official at such time and in such manner as the commissioner may direct.
(c) Reports and other records prepared pursuant to this § of the public officers law.
6. Notification of delinquent property owners. The commissioner's procedures regarding the notification of delinquent property owners shall be subject to the following provisions:
(a) The department shall notify a delinquent property owner by regular mail at least thirty days prior to the date by which his or her past-due property taxes must be paid in full in order to avoid disallowance of his or her STAR credit or exemption.
(b) Such notice shall include a statement that the property owner's STAR credit or exemption will be disallowed unless his or her past-due property taxes are paid in full by the date specified in the notice.
(c) To the extent practicable, such notice shall provide contact information for the local official or officials to whom the past-due property taxes may be paid.
(d) Such notice shall further state that the property owner's right to protest the disallowance of the STAR credit or exemption is limited to raising issues that constitute a "mistake of fact" as defined in subdivision nine of this section.
(e) Such notice may include such other information as the commissioner may deem necessary.
7. Timely payment of past-due property taxes. If a delinquent property owner pays his or her past-due property taxes in full on or before the date specified in such notice, the official receiving such payment shall so notify the department at such time and in such manner as prescribed by the commissioner. The property owner shall then be permitted to receive the STAR credit or exemption that would have been disallowed if timely payment had not been made. However, if the department does not learn of the payment until after it has already directed an assessor to deny a STAR exemption to a delinquent property owner, then in lieu of directing the exemption to be restored, the department may remit to the property owner payment in an amount that will reimburse the property owner for the increase in his or her school tax bill that is directly attributable to the lost STAR exemption.
8. Failure to make timely payment. (a) If the past-due taxes are not paid on or before the date specified in the notice that had been sent to the delinquent property owner, his or her STAR credit or STAR exemption shall be disallowed in accordance with the procedures established by the commissioner.
(b) The property owner shall not be eligible to participate in the STAR program again as long as the property is subject to past-due property taxes.
(c) Upon payment of the past-due property taxes in full, the official receiving such payment shall notify the department at such time and in such manner as may be prescribed by the commissioner. The commissioner shall then proceed as follows:
(i) If the property owner had previously been receiving the STAR credit, the commissioner shall allow the property owner to resume his or her participation in the STAR credit program on a prospective basis, if otherwise eligible, effective with the first taxable year commencing after such payment.
(ii) If the property owner had previously been receiving the STAR exemption, the commissioner shall allow the property owner to participate in the STAR credit program on a prospective basis, if otherwise eligible, effective with the first taxable year commencing after such payment. The property owner shall not be allowed back into the STAR exemption program.
(iii) The commissioner shall, when making the first advanced payment of a STAR credit to the property taxpayer after payment of the past-due property taxes in full, also pay to such property taxpayer the value of the STAR exemptions or STAR credits that were disallowed pursuant to paragraph a of this subdivision.
9. Mistake of fact. Notwithstanding any other provision of law, a disallowance of a STAR credit or STAR exemption pursuant to this section may only be challenged before the department on the grounds of a mistake of fact as defined in this subdivision. The taxpayer will have no right to commence a court action, administrative proceeding or any other form of legal recourse against an assessor, county director of real property tax services or other local official regarding such disallowance. For the purposes of this subdivision, "mistake of fact" is limited to claims that: (i) the individual notified is not the taxpayer at issue; or (ii) the past-due property taxes were satisfied before the date specified in the notice described in subdivision six of this section. However, nothing in this subdivision is intended to limit a taxpayer from seeking relief from joint and several liability pursuant to section six hundred fifty-four of this chapter to the extent that he or she is eligible pursuant to that subdivision or establishing to the department that the enforcement of the underlying property taxes has been stayed by the filing of a petition pursuant to the Bankruptcy Code of 1978 (Title Eleven of the United States Code).
10. Assessors. (a) Notwithstanding any provision of law to the contrary, the department may disclose to assessors such information as the commissioner deems necessary to ensure that the STAR exemptions of delinquent property owners are disallowed as required by this section.
(b) Notwithstanding any provision of law to the contrary, an assessor shall be authorized and directed to deny a STAR exemption to a delinquent property owner upon being directed by the department to do so. If an assessor should receive such a directive after the applicable assessment roll has been filed, the assessor or other official having custody and control of that roll shall be authorized and directed to remove such exemption from such roll prior to the levy of school taxes, without regard to the provisions of title three of Article 5 of the real property tax law or any comparable laws governing the correction of administrative errors on assessment rolls and tax rolls.
11. Recovery of STAR benefits in certain cases. The commissioner may establish procedures to be followed in cases where a STAR credit or exemption was inadvertently or erroneously provided to a delinquent property owner who was sent the notice required by subdivision six of this section, and whose past-due property taxes were not paid in full by the date specified in the notice. Such procedures shall include, but not be limited to, (a) applying the improperly received STAR credit or exemption as an offset against future STAR credits or against other personal income tax credits or personal income tax refunds to which the delinquent property owner would otherwise be entitled, and (b) pursuing any of the other remedies that are available to enforce a personal income tax debt under article twenty-two of this chapter.
(12) Notwithstanding any provision of this section to the contrary, the commissioner shall extend the date by which any delinquent property owner shall be required to pay his or her past-due property taxes in full in order to receive STAR credits or STAR exemptions, until after the end of the COVID-19 state disaster emergency declared by executive order number two hundred two and any further amendments or modifications thereto, and as may be further extended pursuant to § 28 of the executive law. The department shall notify all delinquent property owners of such extension.