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This entry was published on 2014-09-22
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SECTION 255
Supplemental mortgages
Tax (TAX) CHAPTER 60, ARTICLE 11
§ 255. Supplemental mortgages. 1. (a) (i) If subsequent to the
recording of a mortgage on which all taxes, if any, accrued under this
article have been paid, a supplemental instrument or mortgage is
recorded for the purpose of correcting or perfecting any recorded
mortgage, or pursuant to some provision or covenant therein, or an
additional mortgage is recorded imposing the lien thereof upon property
not originally covered by or not described in such recorded primary
mortgage for the purpose of securing the principal indebtedness which is
or under any contingency may be secured by such recorded primary
mortgage, such additional instrument or mortgage shall not be subject to
taxation under this article, except as otherwise provided in paragraph
(b) of this subdivision, unless it creates or secures a new or further
indebtedness or obligation other than the principal indebtedness or
obligation secured by or which under any contingency may be secured by
the recorded primary mortgage, in which case, a tax is imposed as
provided by section two hundred and fifty-three of this article on such
new or further indebtedness or obligation.

(ii) Notwithstanding any provision to the contrary in subparagraph (i)
of this paragraph, the taxes imposed by or pursuant to the authority of
this article shall apply to the recording of a spreading agreement or
additional mortgage which imposes the lien thereof upon real property
located in any city in the state having a population of one million or
more and not originally covered by or described in a recorded primary
mortgage, unless the real property that becomes subject to the lien of
such spreading agreement or additional mortgage is owned by the
mortgagor of the real property subject to the lien of such recorded
primary mortgage. If the commissioner of taxation and finance finds that
transfers of one or both of such properties in connection with the
recording of the spreading agreement or additional mortgage have been
undertaken for the purpose of avoiding or evading the application of
this paragraph rather than solely for an independent business or
financial purpose, such commissioner may disregard such transfers. For
purposes of this subparagraph, there shall be a presumption that all
transfers of one or both of such properties to related parties within
the twelve-month period preceding the recording of such spreading
agreement or additional mortgage have been undertaken for tax avoidance
or evasion purposes and such presumption may be rebutted only with clear
and convincing evidence to the contrary. For this purpose, the term
"related" shall have the same meaning as in paragraph (b) of subdivision
two of section two hundred fifty-three-a of this article except that
references to "fifty percent" in such paragraph (b) shall be read as
"twenty-five percent".

(b) Notwithstanding any provision to the contrary in paragraph (a) of
this subdivision, taxes are imposed at the rates specified in paragraph
(a) of subdivision two of section two hundred fifty-three of this
chapter for each one hundred dollars and each remaining major fraction
thereof of principal indebtedness or obligation secured by or which
under any contingency may be secured by a supplemental instrument or
additional mortgage, whether or not there is any new or further
indebtedness or obligation other than the principal indebtedness or
obligation secured by the recorded primary mortgage, where (i) the
supplemental instrument or additional mortgage imposes the lien of a
recorded mortgage upon real property not previously subject to the
mortgage or where an additional mortgage upon such additional property
is recorded as additional or substitute security for indebtedness or
obligation already secured by a recorded mortgage and such property is
situated in a county where the tax imposed by such paragraph (a) is in
effect and (ii) the recorded primary mortgage was on real property
situated in a county which had suspended the tax imposed by such
paragraph (a) and the mortgage was recorded without payment of such tax.
The taxes imposed by this subdivision shall be distributed pursuant to
section two hundred sixty-one of this chapter in the same manner as a
tax imposed by subdivision two of section two hundred fifty-three of
this chapter.

(c) The taxes imposed by this section shall be paid to the proper
recording officer at the time the supplemental instrument or additional
mortgage is recorded.

2. (a) If, at the time of recording such instrument or additional
mortgage, any exemption is claimed under this section, there shall be
filed with the recording officer and preserved in his office a statement
under oath of the facts on which such claim for exemption is based. The
determination of the recording officer upon the question of exemption
shall be reviewable by the tax commission.

(b) If an exemption is claimed under this section, at any time after
such instrument or additional mortgage is recorded and tax paid, there
shall be filed with the tax commission, as part of the application for
refund a statement under oath of the facts on which such claim for
exemption is based. A copy of the order of refund of the tax commission
shall likewise be filed with the recording officer and preserved in his
office.