Establishes a personal income tax credit for a portion of a taxpayer's residential real property taxes which exceeds a certain percentage of the taxpayer's household gross income; provides that the taxpayer shall have resided in such residential real property for not less than 5 years; provides that such credit shall not apply to taxpayers who have claimed the real property tax circuit breaker credit during the taxable year.
TITLE OF BILL: An act to amend the tax law, in relation to the school district property tax credit and establishing the maximum residential real property, personal income tax credit
PURPOSE OR GENERAL IDEA OF BILL: To place a limit on the real property tax for certain owners and provide a personal income tax credit for certain property taxpayers.
SUMMARY OF SPECIFIC PROVISIONS: SECTION 1: Makes technical amendments to subparagraph (E) of paragraph 1 of subsection (e) of section 606 of the tax law, as amended by chapter 105 of the laws of 2006.
SECTION 2: Adds a new subsection (ss) to section 606 of the tax law to provide for a real property tax credit. The credit will be based on the income of the household and the percentage that said household pays for real property taxes.
City of New York, and the counties of Nassau, Suffolk, Rockland, Westchester, Putnam, Orange and Dutchess Household Adjusted Gross Income Tax Maximum Real Property Tax
$120,000 or less Real Property taxes paid in excess of 6% of said income can receive a personal income tax credit of 70% of the overage.
$120,001 - $175,000 Real Property taxes paid in excess of 7% of said income can receive a personal income tax credit of 70% of the overage.
$175,001 - $250,000 Real Property taxes paid in excess of 8% of said income can receive a personal income tax credit of 70% of the overage.
$250,001 + No credit.
All other counties in the State Household Adjusted Gross Income Tax Maximum Real Property Tax
$90,000 or less Real Property taxes paid in excess of 6% of said income can receive a personal income tax credit of 70% of the overage.
$90,001 - $150,000 Real Property taxes paid in excess of 7% of said income can receive a personal income tax credit of 70% of of the overage.
$150,001 - $250,000 Real Property taxes paid in excess of 8% of said income can receive a personal income tax credit of 70% of the overage.
$250,001 + No credit.
To qualify, the taxpayer must have resided in the home for not less than five years. Also, the taxpayer may still benefit from the Basic STAR exemption or the Enhanced STAR exemption for senior citizens. The credit will equal seventy percent of the taxes paid over the allowed percentage cap as provided in the bill. Such credit shall not exceed $5,000. Taxpayers will have the option to receive either the Circuit Breaker credit or the Middle Class STAR Rebate check.
SECTION 3: Contains the effective date.
JUSTIFICATION: With the increased reliance on the real property tax for local government revenue, some homeowners are facing sky-rocking real property tax bills as a result they are often faced with the serious threat of defaulting on their property taxes and/or seriously consider selling their homes. This legislation seeks to establish a cap on the maximum real property tax paid for New Yorkers who have a household adjusted gross income of $250,000 or less. This proposal is a viable alternative response to the serious problem of high real property taxes.
PRIOR LEGISLATIVE HISTORY: 2009/10: S.253 Investigations and Government Operations; A.7094 Galef held for consideration in Ways & Means 2007/08 S.1053-C Finance; Similar to A.1575-B, Galef, Ways & Means 2006: S.5982-B Local Government, A.11551, Galef, Local Government
FISCAL IMPLICATIONS: To be determined. There are no local fiscal implications.
EFFECTIVE DATE: January 1st after which this legislation has been signed into law and shall apply to taxable years commencing on or after such date.
STATE OF NEW YORK ________________________________________________________________________ 137 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________Introduced by Sen. LITTLE -- 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 the school district property tax credit and establishing the maximum residential real property, personal income tax credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph (E) of paragraph 1 of subsection (e) of section 606 of the tax law, as amended by chapter 105 of the laws of 2006, is amended to read as follows: (E) "Qualifying real property taxes" means all real property taxes, special ad valorem levies and special assessments, exclusive of penal- ties and interest, levied on the residence of a qualified taxpayer and paid during the taxable year
[less the credit claimed under subsection (n-1) of this section]. In addition, for taxable years beginning after December thirty-first, nineteen hundred eighty-four, a qualified taxpay- er may elect to include any additional amount that would have been levied in the absence of an exemption from real property taxation pursu- ant to section four hundred sixty-seven of the real property tax law. If tenant-stockholders in a cooperative housing corporation have met the requirements of section two hundred sixteen of the internal revenue code by which they are allowed a deduction for real estate taxes, the amount of taxes so allowable, or which would be allowable if the taxpayer had filed returns on a cash basis, shall be qualifying real property taxes. If a residence is owned by two or more individuals as joint tenants or tenants in common, and one or more than one individual is not a member of the household, qualifying real property taxes is that part of such taxes on the residence which reflects the ownership percentage of the qualified taxpayer and members of his household. If a residence is anEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00142-01-1 S. 137 2
integral part of a larger unit, qualifying real property taxes shall be limited to that amount of such taxes paid as may be reasonably appor- tioned to such residence. If a household owns and occupies two or more residences during different periods in the same taxable year, qualifying real property taxes shall be the sum of the prorated qualifying real property taxes attributable to the household during the periods such household occupies each of such residences. If the household owns and occupies a residence for part of the taxable year and rents a residence for part of the same taxable year, it may include both the proration of qualifying real property taxes on the residence owned and the real prop- erty tax equivalent with respect to the months the residence is rented. Provided, however, for purposes of the credit allowed under this subsection, qualifying real property taxes may be included by a quali- fied taxpayer only to the extent that such taxpayer or the spouse of such taxpayer occupying such residence for six months or more of the taxable year owns or has owned the residence and paid such taxes. S 2. Section 606 of the tax law is amended by adding a new subsection (ss) to read as follows: (SS) MAXIMUM RESIDENTIAL REAL PROPERTY TAX CREDIT. (1) DEFINITIONS. FOR THE PURPOSES OF THIS SUBSECTION: (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE WHO OWNS THE RESIDENTIAL REAL PROPERTY IN WHICH HE OR SHE RESIDES, AND HAS RESIDED IN SUCH RESIDENTIAL REAL PROPERTY FOR NOT LESS THAN FIVE YEARS. (B) "HOUSEHOLD" MEANS THE TAXPAYER OR TAXPAYERS AND ALL OTHER PERSONS, NOT NECESSARILY RELATED, WHO ALL RESIDE IN THE RESIDENTIAL REAL PROPERTY OWNED BY THE TAXPAYER OR TAXPAYERS, AND SHARE ITS FURNISHINGS, FACILI- TIES AND ACCOMMODATIONS; PROVIDED THAT NO PERSON MAY BE A MEMBER OF MORE THAN ONE HOUSEHOLD AT ONE TIME. (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME OF ALL MEMBERS OF THE HOUSEHOLD FOR THE TAXABLE YEAR AS REPORTED FOR FEDERAL INCOME TAX PURPOSES, OR WHICH WOULD BE REPORTED AS ADJUSTED GROSS INCOME IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO BE FILED, WITH THE MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX HUNDRED TWELVE OF THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF SUCH SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP- ERTY OTHERWISE EXCLUDED FROM SUCH AMOUNT; EARNED INCOME FROM SOURCES WITHOUT THE UNITED STATES EXCLUDABLE FROM FEDERAL GROSS INCOME BY SECTION NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT MONEY NOT INCLUDED IN ADJUSTED GROSS INCOME; NONTAXABLE STRIKE BENEFITS; SUPPLEMENTAL SECURITY INCOME PAYMENTS; THE GROSS AMOUNT OF ANY PENSION OR ANNUITY BENEFITS TO THE EXTENT NOT INCLUDED IN SUCH ADJUSTED GROSS INCOME (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS AND ALL PAYMENTS RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT AND VETER- ANS' DISABILITY PENSIONS); NONTAXABLE INTEREST RECEIVED FROM THE STATE OF NEW YORK, ITS AGENCIES, INSTRUMENTALITIES, PUBLIC CORPORATIONS, OR POLITICAL SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED PURSUANT TO AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS' COMPEN- SATION; THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT OF CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE NEEDY, PAID TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER OR MEMBERS OF HIS OR HER HOUSEHOLD. HOUSEHOLD GROSS INCOME SHALL NOT INCLUDE SURPLUS FOODS OR OTHER RELIEF IN KIND OR PAYMENTS MADE TO INDIVIDUALS BECAUSE OF THEIR STATUS AS VICTIMS OF NAZI PERSECUTION AS DEFINED IN PUBLIC LAW 103-286. PROVIDED, FURTHER, HOUSEHOLD GROSS INCOME SHALL ONLY INCLUDE ALL SUCH INCOME RECEIVED BY ALL MEMBERS OF THE HOUSEHOLD WHILE MEMBERS OF SUCH HOUSEHOLD.S. 137 3
(D) "NET REAL PROPERTY TAX" MEANS THE REAL PROPERTY TAXES ASSESSED ON THE RESIDENTIAL REAL PROPERTY OWNED AND OCCUPIED BY THE TAXPAYER OR TAXPAYERS AFTER ANY EXEMPTION OR ABATEMENT RECEIVED PURSUANT TO THE REAL PROPERTY TAX LAW. (2) CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAXES IMPOSED BY THIS ARTICLE, EQUAL TO SEVENTY PERCENT OF THE AMOUNT WHICH THE TAXPAYER'S NET REAL PROPERTY TAX EXCEEDS THE TAXPAYER'S MAXI- MUM REAL PROPERTY TAX, AS DETERMINED BY PARAGRAPH THREE OF THIS SUBSECTION, PROVIDED, HOWEVER, SUCH CREDIT SHALL NOT EXCEED FIVE THOU- SAND DOLLARS. IF SUCH CREDIT EXCEEDS THE TAX FOR SUCH TAXABLE YEAR, AS REDUCED BY THE OTHER CREDITS PERMITTED BY THIS ARTICLE, THE QUALIFIED TAXPAYER MAY RECEIVE, AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN OVERPAYMENT, WITHOUT INTEREST, ANY EXCESS BETWEEN SUCH TAX AS SO REDUCED AND THE AMOUNT OF THE CREDIT. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO FILE A RETURN PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE, A QUALIFIED TAXPAYER MAY NEVER- THELESS RECEIVE AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN OVERPAYMENT THE FULL AMOUNT OF THE CREDIT, WITHOUT INTEREST. (3) MAXIMUM REAL PROPERTY TAX. (A) A QUALIFIED TAXPAYER'S MAXIMUM REAL PROPERTY TAX SHALL BE DETERMINED AS FOLLOWS: (I) IN THE CITY OF NEW YORK, AND THE COUNTIES OF NASSAU, SUFFOLK, ROCKLAND, WESTCHESTER, PUTNAM, ORANGE AND DUTCHESS: HOUSEHOLD GROSS INCOME MAXIMUM REAL PROPERTY TAX ONE HUNDRED TWENTY THOUSAND SIX PERCENT OF THE DOLLARS OR LESS HOUSEHOLD GROSS INCOME MORE THAN ONE HUNDRED SEVEN PERCENT OF TWENTY THOUSAND THE HOUSEHOLD DOLLARS, BUT GROSS INCOME LESS THAN OR EQUAL TO ONE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS MORE THAN ONE HUNDRED EIGHT PERCENT OF SEVENTY-FIVE THOUSAND THE HOUSEHOLD DOLLARS, BUT LESS THAN GROSS INCOME OR EQUAL TO TWO HUNDRED FIFTY THOUSAND DOLLARS MORE THAN TWO HUNDRED NO LIMITATION. FIFTY THOUSAND DOLLARS (II) IN ALL OTHER COUNTIES IN THE STATE: HOUSEHOLD GROSS MAXIMUM REAL INCOME PROPERTY TAX NINETY THOUSAND SIX PERCENT OF THE DOLLARS OR LESS HOUSEHOLD GROSS INCOME MORE THAN NINETY SEVEN PERCENT OF THOUSAND DOLLARS, BUT THE HOUSEHOLD LESS THAN OR EQUAL TO GROSS INCOMES. 137 4
ONE HUNDRED FIFTY THOUSAND DOLLARS MORE THAN ONE HUNDRED EIGHT PERCENT OF FIFTY THOUSAND DOLLARS, THE HOUSEHOLD BUT LESS THAN OR EQUAL GROSS INCOME TO TWO HUNDRED FIFTY THOUSAND DOLLARS MORE THAN TWO HUNDRED FIFTY NO LIMITATION. THOUSAND DOLLARS (B) THE THRESHOLDS OF HOUSEHOLD GROSS INCOME FOR ELIGIBILITY FOR THE MAXIMUM REAL PROPERTY TAX CREDIT, ESTABLISHED BY SUBPARAGRAPH (A) OF THIS PARAGRAPH, SHALL BE INDEXED FOR INFLATION. (4) EXCLUSIONS FROM ELIGIBILITY. NO CREDIT SHALL BE GRANTED UNDER THIS SUBSECTION IF THE QUALIFIED TAXPAYER CLAIMS THE REAL PROPERTY TAX CIRCUIT BREAKER CREDIT, PURSUANT TO SUBSECTION (E) OF THIS SECTION, DURING THE TAXABLE YEAR. S 3. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law, and shall apply to taxable years commencing on or after such date.