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Volume 8 - Opinions of Counsel SBEA No. 60

Opinions of Counsel index

Taxes (interest and penalties) (villages in Westchester County - collections by town receiver) - Real Property Tax Law, §§ 1431, 1432; Westchester County Administrative Code, § 283.241; 20 NYCRR 605.1:

Rates of interest on unpaid village taxes in Westchester County are prescribed by the RPTL and are not affected by a village appointment of the town receiver of taxes as its collecting officer.

We have received an inquiry concerning rates of interest on village real property taxes collected by a town receiver of taxes in Westchester County.

Pursuant to what is now section 1431 of the Real Property Tax Law [RPTL], any village in Westchester County may appoint the town receiver of taxes as the village tax collecting officer at appropriate compensation (see also, Westchester County Administrative Code, § 283.241). Section 1431 does not prescribe a rate of interest or penalties to be imposed on delinquent village taxes collected by a town receiver; rather, it simply states that “the penalties to be collected . . . shall belong to the village”, and that “penalties . . . shall be daily deposited in the village bank account”. Accordingly, we must look elsewhere for the rate of interest.

The Westchester County Tax Law prescribes penalties for late payment of certain taxes within the County but makes no mention of village taxes (see, § 283.231). However, section 1432 of the RPTL sets forth a schedule of interest charges for late payment of village taxes, which applies in Westchester County unless the board of trustees of a village within that County exercises the option afforded it by subdivision two of this same section of law.

The general rate of interest prescribed by section 1432 is five percent in the second month of the tax collection period and an additional charge for each month (or fraction thereof) thereafter until paid, such additional charge being determined annually by the State Commissioner of Taxation and Finance, pursuant to section 924-a of the RPTL (20 NYCRR 605.1). For villages with a fiscal year of June 1 through May 31, the additional charge for the fiscal year 1985-86 is one percent per month.

However, as noted, villages within Westchester County may elect the interest schedule otherwise offered by subdivision two of section 1432, which is two percent during the second month of tax collection and one percent per month thereafter. If a village board of trustees does not exercise this option, the schedule of interest for tardy payment of taxes in the 1985-86 village fiscal year would be as follows:

June -- no charge
July -- 5%
August -- 6%
September -- 7%
October -- 8%
November -- 9%
December -- 10%

An additional one percent would be charged for each succeeding month of the tax collection period.

March 4, 1985