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Volume 2 - Opinions of Counsel SBEA No. 50

Opinions of Counsel index

Aged exemption (income requirement) (unemployment insurance benefits) - Real Property Tax Law, § 467(3)(a):

Unemployment insurance benefits must be included in determining income for purposes of the aged exemption.

We have received an inquiry regarding the exemption on real property taxes available to aged residents of New York State under section 467 of the Real Property Tax Law.

The question is whether or not unemployment insurance payments are considered income for purposes of this exemption.

It is our opinion that unemployment insurance payments must be included in determining the income of an applicant for this particular exemption.

For the purpose of determining the income of an applicant, paragraph (a) of subdivision 3 of section 467 provides:

“. . . Such income shall include social security and retirement benefits, interest, dividends, net rental income, salary or earnings, and net income from self-employment, but shall not include gifts or inheritances . . . .” (emphasis supplied)

Unemployment insurance payments are considered a substitute for salary or wages. They are a cash inflow to the recipient in exactly the same manner that a salary or wages would be.

The payment of taxes is the duty of every citizen. An exemption from taxation is a privilege granted by the taxing sovereign. When granting the privilege, the sovereign may attach any reasonable condition which tends to implement the overall objective of the exemption. In the case of the exemption for aged property owners this takes the form of an income limit beyond which, it is felt, there is no need of this particular benefit. When the income limit is established, the legislative body is not bound by a concept or definition of “income” from any other sources. What constitutes income for purposes of a particular objective (e.g., eligibility for an exemption) can, and often is, prescribed in the enacting statute. For this reason, exemption statutes have traditionally been strictly construed against the granting of the exemption.

In enacting section 467 of the Real Property Tax Law, the State Legislature saw fit to extend this particular exemption only to property owners whose income (including those items specifically designated as income by the statute) did not exceed a certain limit.

July 30, 1971