S T A T E O F N E W Y O R K
2013-2014 Regular Sessions
I N S E N A T E
January 29, 2013
Introduced by Sen. SEWARD -- 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 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, para-
graph (e) as added by section 2 of part W of chapter 57 of the laws of
2008, and paragraph (f) as added by section 1 of part B of chapter 59 of
the laws of 2012, 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 (G) OF THIS SUBDIVI-
(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 five
hundred thousand dollars, as determined by the commissioner of taxation
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
S. 3050 2
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) Compliance with state tax obligations. The property's eligibility
for the STAR exemption must not be suspended pursuant to section one
hundred seventy-one-y of the tax law due to the past-due state tax
liabilities of one or more of its owners. Notwithstanding any provision
of law to the contrary, where a property's eligibility for a STAR
exemption has been suspended pursuant to such section, the following
provisions shall be applicable:
(i) The property shall be ineligible for a basic or enhanced STAR
exemption effective with the next school year commencing after the issu-
ance of notice by the department of the suspension of its eligibility
for the STAR exemption, even if the notice was issued after the applica-
ble taxable status date. If a STAR exemption has been granted to such a
property on a tentative or final assessment roll, the assessor or other
person having custody of that roll is hereby authorized and directed to
immediately remove that STAR exemption from the roll.
(ii) Any challenge to the factual or legal basis behind the suspension
of a property's eligibility for a STAR exemption pursuant to section one
hundred seventy-one-y of the tax law must be presented to the department
in the manner prescribed by such section. Neither an assessor nor a
S. 3050 3
board of assessment review has the authority to consider such a chal-
(iii) The property shall remain ineligible for the STAR exemption
until the department notifies the assessor that the suspension of its
eligibility has been lifted. Once the assessor has been so notified, the
exemption may be resumed on a prospective basis only, provided that the
eligibility requirements of this section are otherwise satisfied.
(iv) In the case of a cooperative apartment or mobile home receiving a
STAR exemption pursuant to paragraph (k) or (l) of subdivision two of
this section, a suspension of a STAR exemption due to a taxpayer's past-
due state tax liabilities shall only apply to the STAR exemption on the
cooperative apartment or mobile home owned, or deemed to be owned, by
(G) 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, 2013.