Eliminates the twelve percent floor on the rate of interest payable on late payment of real property taxes and delinquencies

BILL NUMBER:A8759

Title of bill

An act to amend the real property tax law, in relation to the rate of interest on late payment of taxes and delinquencies

Purpose or general idea of bill

Eliminates the twelve percent floor on the rate of interest payable on late payment of real property taxes and delinquencies.

Summary of specific provisions

Section One amends subdivision 2 of section 924-a of the real property tax law by deleting the following sentence: "Provided, however, the rate of interest prescribed by this subdivision shall in no event be less than 12 per centum per annum."

Justification

Currently, the rates charged by many municipalities on delinquent property taxes are far higher than those charged by commonly available credit cards. There is no reason to force municipalities to charge a minimum interest rate on late tax payments. Doing so only increases the penalty on people who are already facing financial difficulty.

The rate charged will still be set by the commissioner of tax and finance, pursuant to subsection (j) of section 697 of the tax law. The only change will be the elimination of the 12% floor on this rate.

Prior legislative history

1997-98: Remained in Committee 1999-00: Remained in Committee 2001-02: Remained in Committee 2003-04: Remained in Committee 2005-06: Remained in Committee 2007-08: Remained in Committee

Fiscal implications

There may be some loss of revenue to municipalities, should interest rates drop, and depending upon the level of delinquent taxes owed the locality.

Effective date

This act shall take effect on the first day of January next succeeding the date on which it shall have become a law.