Senate Bill S2449

                                BILL NUMBER:S2449

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:

Senate bill S.6347 of 2014.

FISCAL IMPLICATIONS:

Minimal to the State.

LOCAL FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.