Disallows corporate and personal income tax deductions for property in continued noncompliance with regard to rent impairing violations

BILL NUMBER:S952A

TITLE OF BILL:: An act to amend the tax law, the multiple dwelling law, and the multiple residence law, in relation to disallowing corporate and personal income tax deductions for property in continued noncompliance with regard to rent impairing violations

Purpose

This bill would disallow State income tax deductions for owners of substandard residential rental property.

Summary of provisions

Section 210 of the tax law is amended by adding a new subdivision 24-a. Subsection (b) of section 612 of the tax law is amended by adding a new paragraph 8. Section 303 of the multiple dwelling law is amended with 2 new subdivisions, 1b and 1c. Section 303 of the multiple residence law is amended by adding a new subdivision 7.

The provisions of this act will not apply to a city with a population of one million or more.

Justification

This bill provides local officials with additional means of dealing with the problem of substandard rental housing. If the owner derives rental income from this substandard housing, and refuses to comply with a notice of the violations, this bill provides. that any tax deductions taken for interest, taxes, depreciation or amortization paid with respect to the housing cannot be allowed in the computation of the owner's personal income or corporate tax liability. The State of New York should not allow landlords who maintain substandard property, much of which is used for illegal purposes to receive tax brakes on such property. This bill will stop such parties as demonstrated in California which enacted similar legislation.

Legislative history

S.3498 of 2005/2006; S.628 of 2007/2008. S.601 of 2009/10.

Fiscal implications

None to the State; provides additional revenue to local governments;

Effective date

This act shall take effect immediately.