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Volume 9 - Opinions of Counsel SBEA No. 64

Opinions of Counsel index

Taxes, collection (interest) (military service) - Military Law, § 314; Real Property Tax Law, § 924-a:

Interest on delinquent taxes is imposed at the rate of one half percent per month in the case of real property owned by a person in active military service.

Our opinion has been requested concerning the application of the provisions of the Military Law, section 314, (sometimes referred to as the “Soldiers’ and Sailors’ Civil Relief Act”) with respect to the rate of interest applicable in the case of tax delinquent real property which is owned by a person in military service.

Both the Federal and State Soldiers’ and Sailors’ Civil Relief Acts (50 U.S.C.S. § 510 et seq.; N.Y.S. Military Law, § 300 et seq., respectively) must be considered. Section 560 of the Federal law and section 314 of the State law provide certain protection to the property, including real property, of a person in military service. Both sections delay the enforcement of the collection of real property taxes on “real property owned and occupied” for dwelling (or other specified) purposes “by a veteran in military service or his dependents, at the commencement of his period of military service and still so occupied by his dependents or employees. . . .” The provisions of these statutes are discussed in 8 Op.Counsel SBEA No. 116.

Subdivision (4) of Military Law, section 314, provides that:

Whenever any tax or assessment shall not be paid when due, such tax or assessment due and unpaid shall bear interest until paid at the rate of six percentum per annum, and no other interest or penalty shall be incurred by reason of such nonpayment, whether such penalty or interest shall have accrued prior or shall accrue subsequent to the commencement of the . . . military service. . . .

It has been suggested that this provision (and the virtually identical provision in 50 U.S.C.S., § 560(4)) has no application to town tax collecting officers because the rate of interest on delinquent town taxes is one percent per month during the collection period (RPTL, §§ 924, 924-a). We do not agree with this conclusion.

The statutes clearly provide that “no other penalty or interest shall be incurred” except that statutorily provided rate of six percent per annum. This clearly precludes the application of any other rate of interest, including that provided by RPTL, section 924-a. It is also worth noting that the rate of interest provided in section 924-a, which is to be applied by collecting officers pursuant to section 924, may be no less than 12 percent per annum. This is twice the annual rate of interest prescribed in the above-noted statutes. It is suggested that since most collectors’ warrants are open for three months for a total of three percent interest, that the provisions of the above-referenced Acts would not be invoked.

We do not agree. The section 924-a interest rate is currently at the statutory minimum of 12 percent per annum, and the fact that it breaks down to one percent per month and three percent for the collection period does not change this computation of interest. Note in this regard that the so-called “Soldiers’ and Sailors’ Civil Relief Act” is a remedial statute and must be liberally construed in favor of the servicemen whose interests it is intended to protect (United States v. State of Illinois, 387 F.Supp. 638 (E.D. Illinois 1975); United States v. Ulster County, 281 F.Supp. 1001 (E.D. Pennsylvania 1968)).

Accordingly, the rate of interest applicable to a tax delinquent property in any case in which the Act has application is six percent per annum or 1/2 percent per month, regardless of what the RPTL may provide for other taxpayers to whom the Act’s provisions are not applicable.

January 3, 1991