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Volume 8 - Opinions of Counsel SBEA No. 51

Opinions of Counsel index

State Board (powers and duties) (exemption applications - nonprofit organizations) - Real Property Tax Law, §§ 202, 420-a, 420-b; 9 NYCRR 190-1.4:

Organizations which qualify for exemption under section 420-a of the RPTL are not statutorily required to apply for exemption, but assessors may not grant exemptions pursuant to either section 420-a or 420-b in the absence of properly completed application forms.

We are asked under what authority the State Board requires that renewal application forms for exemption under Real Property Tax Law, section 420, be filed annually. It is suggested that the exemption provisions of the Real Property Tax Law expressly state that property once exempt remains exempt so long as it continues to be owned and used for exempt purposes and there is no requirement that the owner and user continually prove exempt status after it is initially established.

Section 420 of the Real Property Tax Law was repealed in 1981 and enacted as two new sections (L.1981, c.919). Those categories of exempt purposes previously included in section 420(1)(a) are now contained in section 420-a, entitled “Nonprofit organizations; mandatory class.” Those categories previously included in section 420(1)(b) are now found in section 420-b, entitled “Nonprofit organizations; permissive class.”

Subdivision seven of section 420-b specifically provides that an exemption may be granted pursuant to this section only upon application made by the owner of the property on a form prescribed by the State Board. Accordingly, application forms, both original and renewal, are now statutorily required for properties in the “permissively exempt” category.

The contention that the Real Property Tax Law expressly provides that exemptions, once granted, must be continued is incorrect in relation to the nonprofit exemptions. While it is true that some exemptions are continued from year to year without requiring new application forms, the statutory language of those sections expressly provides for such continuation. For example, paragraph three of subdivision one of section 458 (the veterans exemption) provides that entries of the amount of exemption “shall be made and continued in each assessment of the property so long as it is exempt . . .” (emphasis added). There is no language similar to this in either section 420-a or 420-b.

The courts of this State have recognized that each taxable year is separate and distinct and an adjudication that property was exempt one year cannot constitute an adjudication as to whether it should be exempt in another year (see, F.O.R. Holding Co. v. Board of Assessors of Town of Clarkstown, 45 A.D.2d 875, 357 N.Y.S.2d 875 (2d Dept., 1974), app. dsmd., 35 N.Y.2d 959 (1974); People ex rel. Watchtower Bible & Tract Society v. Haring, 286 App. Div. 676, 146 N.Y.S.2d 151 (3d Dept., 1955); People ex rel. Hilton v. Fahrenkopf, 279 N.Y. 49, 17 N.E.2d 765 (1938)). Clearly, this holding is also true for the assessor’s determination concerning exempt status of property. A determination that the property exempt in one year cannot constitute a determination that is exempt the next. The purpose of the renewal application forms is to provide the assessor with information regarding any changes in the applicant’s organizational purposes or use of the property so that he or she may determine if the taxable status of property has changed.

Assessors are required to retain on file a properly completed application form for each exemption which is entered on the assessment roll, whenever the State Board has prescribed an application form (9 NYCRR 190-1.4). The State Board has prescribed renewal application forms for the nonprofit exemption (RPTL, § 202(1)(h)). Accordingly, an assessor who grants a nonprofit exemption without having a properly completed renewal application form on file has failed to comply with a provision of the rules the State Board.

January 21, 1982

NOTE:  See Opinion  9-76By amendments of subdivision (c) of 9 NYCRR 190-1.4 effective February 17, 1986, an assessor may grant exemptions to real property of a nonprofit organization in the “mandatory class” (RPTL, § 420-a) which has not filed an exemption application form, provided the assessor has on file a statement certified by the assessor that he or she has examined the property for which exemption has been granted and that all of the requirements of RPTL, § 420-a have been satisfied.