Bill S6347-2013

Relates to a real property tax exemption for property owned by a limited liability company

Permits a STAR exemption for property owned by a limited liability company where the limited liability company is owned by a person to whom the exemption would have otherwise been granted.

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  • Jan 17, 2014: REFERRED TO LOCAL GOVERNMENT

Memo

BILL NUMBER:S6347

TITLE OF BILL: An act to amend the real property tax law, in relation to a real property tax exemption for property owned by a limited liability company

PURPOSE: To allow an otherwise qualified property owner to receive the STAR (School Tax Relief) exemption on his or her primary residence if the residence is owned by a limited liability company (LLC) which is owned by the property owner.

SUMMARY OF PROVISIONS:

Section 1 amends subdivision 3 of Section 425 of the Real Property Tax Law, which provides for the STAR exemption, by adding a new paragraph e-1 which adds a primary residence owned by a limited liability company to the type of property eligible for the STAR exemption. It also provides that such property must serve as the primary residence of one or more of the members of the LLC and that those members who reside thereon personally pay the real property taxes associated with the property's ownership,

EXISTING LAW: Real property owned by a LLC is not eligible for a STAR exemption

JUSTIFICATION: New York State's School Tax Relief (STAR) Program provides an exemption from school taxes for most owner-occupied, primary residences. It is unfair to deny this benefit to an otherwise qualified taxpayer because his or her residence is owned by a LLC of which the qualified property taxpayer is the owner.

Under interpretation of current law when an individual who otherwise would be entitled to a STAR exemption owns his or her primary residence as part of a LLC, the individual may not receive the STAR exemption.

In addition, current law allows that if the taxpayer's primary residence is not an eligible type of property (i.e. one, two or three family residence, a farm dwelling or residential property held in condominium or cooperative form of ownership), but a portion of the property is partially used by the owner as a primary residence, that portion which is used as the primary residence may be entitled to the STAR exemption. However, this is not currently allowed if the person owns the property through a LLC.

The nature of the ownership of the primary residence should not disqualify an otherwise qualified taxpayer from receiving the STAR exemption. This legislation eliminates this inequity by allowing the STAR exemption on that part of the property owned by a LLC which serves as the primary residence of the owner(s) of the LLC.

LEGISLATIVE HISTORY: This is a new bill

FISCAL IMPLICATIONS: Minimal to the State.

LOCAL FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6347 IN SENATE January 17, 2014 ___________
Introduced by Sen. FARLEY -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to amend the real property tax law, in relation to a real proper- ty tax exemption for property owned by a limited liability company 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 is amended by adding a new paragraph (e-1) to read as follows: (E-1) DWELLINGS OWNED BY A LIMITED LIABILITY COMPANY. IF LEGAL TITLE TO A DWELLING IS HELD BY A LIMITED LIABILITY COMPANY, THE EXEMPTION SHALL BE GRANTED IF THE PROPERTY SERVES AS THE PRIMARY RESIDENCE OF ONE OR MORE OF THE MEMBERS OF THE LIMITED LIABILITY COMPANY, PROVIDED THAT THE MEMBER OR MEMBERS WHO PRIMARILY RESIDE THEREON PERSONALLY PAY ALL OF THE REAL PROPERTY TAXES AND OTHER COSTS ASSOCIATED WITH THE PROPERTY'S OWNERSHIP. S 2. This act shall take effect immediately.

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