What's happening
This bill requires nonprofit property owners to annually prove tax exemption eligibility by clear and convincing evidence, with new assessor guidance.
Why it matters
Raises the standard of proof. for nonprofits seeking property tax exemptions, requiring them to provide "clear and convincing evidence" every year—a much higher bar than previously required, which could make it more difficult for organizations to maintain their exemptions.
Creates an annual renewal process. , meaning nonprofits must now re-establish their eligibility each year rather than receiving ongoing exemptions, potentially increasing administrative work and uncertainty for charitable, religious, and educational institutions.
Mandates new state-issued guidance. for local property assessors, developed in consultation with both nonprofits and assessors, which could lead to more consistent—but also more rigorous—application of exemption standards across different communities.
May impact nonprofit budgets and services. by increasing compliance costs and the risk of losing exemptions, which could reduce resources available for community programs if organizations fail to meet the heightened requirements.
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Who cares
Headline styles
Tighten Nonprofit Tax Exemptions
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 42
1 Co-sponsor
History
- Referred to local government
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tighten Nonprofit Tax Exemptions
In Assembly Committee · Real Property Taxation · Sponsor Aileen Gunther
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
996
2017-2018 Regular Sessions
IN SENATE
January 6, 2017
Introduced by Sens. BONACIC, LARKIN -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the real property tax law, in relation to the exemption from taxation for non-profit organizations
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 420-a of the real property tax law is amended by adding a new subdivision 15 to read as follows:
15. In all instances, the burden of annually establishing that the requirements of this section have been satisfied shall be upon the owner of the property and must be proven by clear and convincing evidence. The department shall develop, in consultation with not-for-profit organizations and assessors, guidance documents to be used by assessors in determining whether the standard of proof established by this subdivision has been met.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to assessment rolls prepared on the basis of taxable status dates occurring on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03189-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to the exemption from taxation for non-profit organizations
Purpose
To place the responsibility of annually establishing that a not-for-profit corporation or association is entitled to real property tax exemptions upon such corporation or association.
Summary of provisions
Section 1: Amends section 420-a of the Real Property Tax Law by adding a new subdivision 15 to require that the owner of a property which is tax exempt pursuant to section 420-a of the Real Property Tax Law, prove annually, by clear and convincing evidence, that the requirements of section 420-a have been satisfied. Further, this new subdivision provides that the New York State Department of Taxation and Finance shall develop, in consultation with not-for-profit organizations and assessors, guidance documents which shall be used by assessors to determine whether the standard of proof has been met.
Read the full memo (676 words)
Section 2: Effective date.
Existing law
While not-for-profit corporations or associations must initially seek the granting of an exemption under Section 420-a, they are not required to do so on an annual basis, nor are they regularly compelled to provide convincing evidence that such exemption should continue to apply.
Justification
This proposed measure is one of a series of bills aimed at reconstructing the framework for granting real property tax exemptions across the state. Based on year 2012 assessment rolls, there are over 5.7 million parcels of property in New York State (valued at a total of over $2.5 trillion). Of this number, some 3.5 million parcels enjoy at least 1 real property tax exemption. From a taxable status standpoint, over 32.4% of the total value of property in New York State ($826 billion) is either wholly or partially exempt from real property taxation.
The lion's share of real property tax exemptions are state mandated, and while the state has provided some reimbursement to relieve local taxing jurisdictions (i.e. through the STAR program), high levels of tax exemptions can present a serious burden to other property owners who must support the cost of school district, municipal and special district operations.
The State must help provide tools which promote greater accountability from those seeking real property exemptions in order to balance public needs and benefits. This specific legislation offers such a tool by seeking to ensure that organizations which seek tax exemption truly met those public purposes, and that lands receiving relief from real property taxation are being fully used in support of such purposes.
Legislative history
S.1372 of 2016: Died in Senate Local Government, Died in Assembly Real Property Taxation
S.1372 of 2015: Died in Senate Local Government, Died in Assembly Real Property Taxation S.878 of 2014: Died in Senate Local Government, Died in Assembly Real Property Taxation S.878 of 2013: Died in Senate Local Government, Died in Assembly Real Property Taxation S.2545-A of 2012: Died in Senate Local Government, Died in Assembly Real Property Taxation S.2545 of 2011: Died in Senate Local Government, Died in Assembly Ways and Means S.8474 of 2010: Died in Senate Rules S.478 of 2008: Died on Senate Floor Calendar, Died in Assembly Ways and Means S.478 of 2007: Died in Senate Local Government, Died in Assembly Real Property Taxation S.3926 of 2006: Died on Senate Floor Calendar, Died in Assembly Real Property Taxation S.3926 of 2005: Died on Senate Floor Calendar, Died in Assembly Real Property Taxation S.1123-A of 2004: Died in Senate Local Government, Died in Assembly Real Property Taxation S.1123-A of 2003: Died on Senate Floor Calendar
Fiscal implications
None to the state.
Local fiscal implications
Undetermined, however, it is anticipated the bill will offer improved local oversight of exemptions, with a salutary effect on school, municipal and special district (i.e. fire protection) tax rolls.
Effective date
This act shall take effect on the first of January next succeeding the date on which it shall have become law and shall apply to assessment rolls prepared on the basis of taxable status dates occurring on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.