Provides school tax exemption relief (STAR) to small business with 20 or fewer employees.
TITLE OF BILL: An act to amend the real property tax law, in relation to extending the benefits of the STAR program to small businesses
PURPOSE: To make real property owned by a small business eligible for the STAR program.
SUMMARY OF PROVISIONS: Section 1 would amend subdivision 3 of section 425 of the real property tax law by adding real property owned by a small business to the list of categories eligible for the STAR program, and defines "small business" as one which employs twenty persons or less.
Section 2 provides for an immediate effective date, applicable to taxable years beginning on and after January 1, 2011.
JUSTIFICATION: The STAR program provides for a partial exemption from school property taxes for owner-occupied, primary residences. Senior citizens were the first to benefit based on income eligibility, and the program has since been extended to include all New Yorkers who own their own home. STAR works by exempting a portion of the property's assessed valuation from the school tax rate. This bill would expand the STAR program to real property owned by small businesses (twenty or less employees). The same economic pressures that have been brought to bear on senior citizens and residential home owners have affected small businesses' ability to compete in the market place and to expand and create more jobs. School property tax relief is a key ingredient in easing the heavy hand of government on an essential component of New York's economic engine: small business.
LEGISLATIVE HISTORY: S.3055 of 2009-10; S.2734/A.3412 of 2007-08.
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: Immediately, applicable to taxable years beginning on and after January 1, 2011.
STATE OF NEW YORK ________________________________________________________________________ 2376 2011-2012 Regular Sessions IN SENATE January 19, 2011 ___________Introduced by Sens. SEWARD, BONACIC, DeFRANCISCO, FUSCHILLO, GRISANTI, LARKIN, MAZIARZ, O'MARA, RANZENHOFER -- read twice and ordered print- ed, and when printed to be committed to the Committee on Local Govern- ment AN ACT to amend the real property tax law, in relation to extending the benefits of the STAR program to small businesses THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 3 of section 425 of the real property tax law, as added by section 1 of part B of chapter 389 of the laws of 1997, paragraph (a) as amended by chapter 264 of the laws of 2000, paragraph (b-1) as added by section 1 of part FF of chapter 57 of the laws of 2010, paragraph (d) as added by chapter 443 of the laws of 2003 and paragraph (e) as added by section 2 of part W of chapter 57 of the laws of 2008, is amended to read as follows: 3. Eligibility requirements. (a) Property use. To qualify for exemption pursuant to this section, the property must be a one, two or three family residence, a farm dwelling, A SMALL BUSINESS or residential property held in condominium or cooperative form of ownership. If the property is not an eligible type of property, but a portion of the prop- erty is partially used by the owner as a primary residence, that portion which is so used shall be entitled to the exemption provided by this section; provided that in no event shall the exemption exceed the assessed value attributable to that portion. (b) Primary residence. The property must serve as the primary resi- dence of one or more of the owners thereof, UNLESS SUCH PROPERTY IS OWNED BY A SMALL BUSINESS AS DEFINED IN PARAGRAPH (F) OF THIS SUBDIVI- SION. (b-1) Income. For final assessment rolls to be used for the levy of taxes for the two thousand eleven-two thousand twelve school year and thereafter, the parcel's affiliated income may be no greater than fiveEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05745-01-1 S. 2376 2
hundred thousand dollars, as determined by the commissioner of taxation and finance pursuant to section one hundred seventy-one-u of the tax law, in order to be eligible for the basic exemption authorized by this section. As used herein, the term "affiliated income" shall mean the combined income of all of the owners of the parcel who resided primarily thereon on the applicable taxable status date, and of any owners' spous- es residing primarily thereon. For exemptions on final assessment rolls to be used for the levy of taxes for the two thousand eleven-two thou- sand twelve school year, affiliated income shall be determined based upon the parties' incomes for the income tax year ending in two thousand nine. In each subsequent school year, the applicable income tax year shall be advanced by one year. The term "income" as used herein shall have the same meaning as in subdivision four of this section. (c) Trusts. If legal title to the property is held by one or more trustees, the beneficial owner or owners shall be deemed to own the property for purposes of this subdivision. (d) Farm dwellings not owned by the resident. (i) If legal title to the farm dwelling is held by an S-corporation or by a C-corporation, the exemption shall be granted if the property serves as the primary resi- dence of a shareholder of such corporation. (ii) If the legal title to the farm dwelling is held by a partnership, the exemption shall be granted if the property serves as the primary residence of one or more of the partners. (iii) Any information deemed necessary to establish shareholder or partner status for eligibility purposes shall be considered confidential and exempt from the freedom of information law. (e) Dwellings owned by limited partnerships. (i) If legal title to a dwelling is held by a limited partnership, the exemption shall be grant- ed if the property serves as the primary residence of one or more of the partners, provided that the limited partnership which holds title to the property does not engage in any commercial activity, that the limited partnership was lawfully created to hold title solely for estate plan- ning and asset protection purposes, and that the partner or partners who primarily reside thereon personally pay all of the real property taxes and other costs associated with the property's ownership. (ii) Any information deemed necessary to establish partner status for eligibility purposes shall be considered confidential and exempt from the freedom of information law. (F) FOR THE PURPOSES OF THIS SUBDIVISION THE TERM "SMALL BUSINESS" SHALL MEAN A BUSINESS WHICH EMPLOYS TWENTY PERSONS OR LESS. S 2. This act shall take effect immediately and shall apply to all taxable years beginning on and after January 1, 2011.