NY Lawmakers OK Property Tax Deferral Bill Amid COVID-19

By James Nani
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Law360 (June 1, 2020, 5:18 PM EDT) -- Local taxing jurisdictions in New York could defer scheduled payments or installment payments for property taxes because of the COVID-19 state of emergency, under a bill passed by the state Legislature. 

S.B. 8138B passed the state Assembly on Thursday, 128-15, after being substituted for its Assembly companion, A.B. 10252A. The bill would allow localities to authorize deferred scheduled or installment payments for property tax collection during a declared state of emergency, according to a bill summary.

The bill, sponsored by Sen. Monica Martinez, D-Brentwood, passed the Senate by a 62-0 vote Wednesday. The bill was sent back to the Senate, which will deliver it to Gov. Andrew Cuomo, a Democrat, for consideration.

Assemblyman Steve Stern, D-Huntington, who sponsored the Assembly bill, said on the Assembly floor Thursday that localities could opt in to either pushing back the date that property taxes were owed or allowing for installment payments.

The bill raised concerns from Republicans over how some taxing jurisdictions would receive tax payments from other jurisdictions that may not opt in to the measure and are in charge of tax collection, such as counties that collect taxes on behalf of villages. Questioned by Assemblyman Edward Ra, R-Franklin Square, and Assemblyman Andy Goodell, R-Jamestown, on how the legislation would allow for the distribution of such taxes to other authorities, Stern said those localities would have to work together to resolve those complications.

"The various taxing districts need to come together to work out what procedure works out best for them," Stern said.

During the payment deferment period, no additional interest or penalties would accrue, and once the state's disaster emergency was lifted, taxes would be collected in installments, the bill said. Taxing jurisdictions would not be allowed to defer scheduled payments of taxes of other taxing jurisdictions without those other jurisdictions passing a law to do so, the legislation says. Tax payments could be deferred only up to 120 days past the original due date of taxes, the legislation says.

In a press release Friday, Martinez said passage of the bill would allow local taxing jurisdictions to support families by allowing them to pay their property taxes later without facing penalties. She said she was hopeful the governor would sign it.

"Many residents are facing the worst economic hardship of their lives," Martinez said. "Businesses have been closed for months, employee pay has been cut, and in many cases there have been layoffs. New York has some of the highest property taxes in the nation and the state Legislature must enable property tax relief for those in need."

Caitlin Girouard, a spokeswoman for Cuomo's office, said the legislation was under review.

The measure is part of a larger flurry of action taken by New York lawmakers last week to take up various relief measures, and other legislation, to deal with the novel coronavirus, which causes the respiratory disease COVID-19.

Assembly and Senate lawmakers last week also approved S.B. 8122B, which would allow localities to pass laws to extend the deadline to July 15 for real property tax abatement applications and renewal applications, according to a bill summary.

They also approved S.B. 8113A, which prohibits localities and utilities from terminating services to residential customers if they've failed to pay taxes or bills during the COVID-19 state emergency and 180 days after it is lifted. Residents would also be allowed to restructure or defer payments on those services if they've been financially hurt by the state of emergency, the bill said.

And lawmakers in both chambers also passed S.B. 8411, which would allow certain New York City business taxes to be decoupled from the federal tax provisions enacted through the federal Coronavirus Aid, Relief and Economic Security Act , or CARES Act.

The measure would decouple from the federal law the city's unincorporated business corporation tax, the general corporation tax, the city banking tax and the city business corporation tax, according to a bill summary, and potentially save the city $50 million in the 2020-2021 fiscal year and $25 million in the 2021-2022 fiscal year.

Other states have passed similar legislation to try to bring property tax relief, including New Jersey, which last week extended to July 1 the deadline to file 2020 property tax assessment appeals, and extended deadlines for county tax boards to decide such cases.

--Editing by Robert Rudinger.

For a reprint of this article, please contact reprints@law360.com.

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