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Volume 12 - Opinions of Counsel SBRPS No. 22

Opinions of Counsel index

School tax relief (STAR) exemption (generally) (income reporting period-senior citizens exemption application); Senior citizens exemption (generally) (eligibility for enhanced STAR exemption) - Real Property Tax Law §§ 425, 467:

Where an applicant for the senior citizens exemption qualifies on the basis of his or her income for the year immediately preceding the taxable status date exemption filing deadline, the applicant is also entitled to the enhanced school tax relief (STAR) exemption. Where, however, such applicant’s income exceeds the senior citizens exemption’s statutory income ceiling, in order to receive enhanced STAR, the applicant must provide his or her income for the year which is two years preceding the taxable status date filing deadline.

We have received an inquiry concerning which year’s income must be submitted to prove eligibility for the senior citizens exemption (Real Property Tax Law, § 467) and for the enhanced school tax relief (STAR) exemption (RPTL, § 425(4)). Both statutes measure exemption eligibility as of taxable status date (RPTL, § 302(1), see Long Island Power Authority v. Shoreham-Wading River Central School District, 88 NY2d 503, 670 NE2d 419, 647 NYS2d 135 (1996)).

Section 467(3)(a) of the RPTL provides, in relevant part, that “the income of the owner or the combined income of the owners of the property for the income tax year immediately preceding the date of making application for exemption” must be submitted to the assessor. Given the generally applicable April 15 income tax filing deadline, when taxable status date was May 1 (prior to the effective date of L.1984, c. 379), most applicants for the senior citizen exemption could readily provide their income tax data for the “immediately preceding” tax year. However, taxable status date in most New York State towns is now March 1. So, in 10 Op.Counsel SBRPS No. 47 we noted that, with respect to the senior citizens exemption, “[i]t seems to us that the most reasonable interpretation of this statutory language is that an applicant should provide a copy of his or her income tax return for the ‘immediately preceding year’ if it is available when the application is filed. If that return is not yet available, the applicant should be permitted to provide the return for the year before the ‘immediately preceding year.’” That remains our opinion as to the senior citizens exemption, but STAR was amended thereafter (the latest such amendment being chapter 83 (Part E, § 3) of the Laws of 2002).

There is now no discretion as to which year’s income must be submitted in support of an enhanced STAR exemption. Section 425(4)(b)(i)(B) of the RPTL provides that for 2003 final assessment rolls, 2001 income was to be used to determine exemption eligibility and section 425(4)(b)(i)(C) provides, in relevant part, that “[f]or final assessment rolls to be completed in each ensuing year, the applicable tax year . . . shall be advanced by one year. . . .”  In other words, an applicant for enhanced STAR generally must submit income information for the income tax year which is two years prior to the applicable assessment roll for which exemption is being sought (e.g., 2009 STAR income eligibility is based on 2007 income).

However, section 425(6)(c) of the RPTL provides, in part, as follows: “Senior citizens exemption. When property is eligible for the senior citizens exemption authorized by [RPTL, § 467], it shall also be deemed to be eligible for the enhanced exemption authorized by this section . . . and no separate application need be filed therefor.” The Legislature clearly wanted to avoid requiring low income seniors to file separately for enhanced STAR and the senior citizens exemptions. The issue then is how to read the provisions of the two exemptions, which, as explained above, may be based upon two different income tax years, in a manner which will advance legislative intent.

In our “Instructions for the Application for the Partial Real Property Tax Exemption for Senior Citizens Exemption (and for Enhanced School Tax Relief (STAR) Exemption)” (RP-467-Ins (9/08)), we advise applicants:

If you qualify for the senior citizens exemption, you will automatically qualify for the enhanced School Tax Relief (STAR) Exemption (Real Property Tax Law, sec.425 (4)) as well; no separate STAR application will be required. In that case, after the senior citizens exemption has been applied, a substantial portion (in some cases, all) of the remaining assessed value of your property will be exempted for school tax purposes under STAR.

If you apply for both the senior citizens exemption and the enhanced STAR exemption on application form RP-467, and the assessor finds that you do not qualify for the senior citizens exemption, you may still receive the enhanced STAR exemption if your application demonstrates that you meet the eligibility requirements for the enhanced STAR exemption. If not, you may be required to submit additional documentation including the STAR application (RP-425).

That “additional documentation” clearly encompasses income data.

To summarize, by using as an example of applications to be submitted for the 2009 assessment roll: If a taxpayer applies for the senior citizens exemption and is eligible as a result of submitting 2008 income information, then he or she is automatically eligible for enhanced STAR. However, if such a taxpayer’s 2008 income exceeds the requirement for the senior citizens exemption eligibility, then such taxpayer must submit proof of his or her 2007 income to qualify for enhanced STAR. We recommend that the assessor give such an applicant a reasonable period of time in which to submit the appropriate year’s proof of income.

February 9, 2009

Updated: