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.

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S137-2011 Actions

• Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Jan 5, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S137-2011 Memo

BILL NUMBER:S137

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.

S137-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     137

                         2011-2012 Regular Sessions

                              I N  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  an

   EXPLANATION--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 INCOME

 S. 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.