Volume 2 - Opinions of Counsel SBEA No. 100
Taxes (obligation of city to collect) - General Municipal Law, Article 5-g; Real Property Tax Law, § 936:
The City of Newburgh may adopt a local law relieving itself of the obligation to collect state and county taxes.
We have received an inquiry posing several questions relating to the collection of city and county taxes within the City of Newburgh. This situation is a direct result of the court decision which holds that the City of Newburgh may adopt a local law relieving itself of the obligation to collect state and county taxes (County of Orange v. City of Newburgh, 68 Misc.2d 998, 328 N.Y.S.2d 891).
The first question is whether there are any cities in the state which collect city and county taxes and then turn over the delinquent accounts to the county for collection and enforcement. Our information indicates that in the Cities of Albany and Olean the city is the collection agency for both the general city levy and the state and county levy. For both cities the county is the enforcement agency for all taxes. In addition, in several other cities the city collects and enforces the general city levy, and it collects the state and county levy, but then forwards the delinquencies from that levy to the county for enforcement. These cities are the following:
- Buffalo
- Corning
- Elmira
- Glen Cove
- Hornell
- Ithaca
- Lackawanna
- Little Falls
- Lockport
- Long Beach
- Niagara Falls
- North Tonawanda
- Oswego
- Rensselaer
- Rochester
- Rome
- Sherrill
- Tonawanda
The second question is, if, within the city, the county collects only the state and county taxes, whether the five percent penalty must be added to delinquencies from this levy which are returned to the county for enforcement. If the county collects and enforces delinquent taxes, then the procedure which is mandated by law is that which is set forth in Articles 9, 10 and 11 of the Real Property Tax Law. Section 936(2) of Article 9 requires that the five percent be added upon the return to the county of the warrant and the account of delinquencies.
If, on the other hand, the city enforces either city taxes or state and county taxes, or both, then such enforcement is governed by the city charter. Therefore, if the city continues to enforce the delinquencies from the general city levy, the penalty and interest provisions of the city charter will apply (Newburgh City Charter, §§ 8.20, 8.22).
It is possible that if the first proposed method is adopted, then the return of the delinquent city taxes might include only the second and third installments from the three installment plan used by the city (Newburgh City Charter, § 8.16). That is, there is a possibility that a property owner might pay his first installment of city taxes, but neglect to pay the second or third or both subsequent installments.
The third question is which dates control for the computation of interest against these delinquent amounts. Section 8.22 of the Newburgh City Charter provides, in part, that “all taxes or installments thereof . . . remaining unpaid for ninety days after the first date designated for collection of same, shall bear interest at the rate of eight per cent per annum from said first date of collection.” During the ninety-day period from the first date upon which each installment becomes due, fees attach pursuant to section 8.20 of the City Charter, which provides, in part, that “fees shall be so fixed and graduated by the city council as to encourage prompt payment of the taxes, and shall not exceed one per centum on the taxes paid within fifteen days after the first day designated for receiving taxes, nor five per centum on the taxes paid thereafter.”
In our opinion, the fees and interest set forth in sections 8.20 and 8.22 attach to the amount of each installment which is due from the date when each becomes delinquent (i.e., fifteen days after the due date). And, of course, the county would be bound by these provisions if it collected or enforced city taxes.
The final question is whether the proposed agreement would require an act of the State Legislature. The short answer to this question is no. However, there are several conditions. First, the city charter cannot be amended to require the county to collect and enforce taxes (either the city or the county-state levy) according to procedures established by the city. The county’s collection and enforcement activities are governed by the Real Property Tax Law. Second, the precise dates for the return to the county of unpaid city taxes may be established pursuant to an agreement between the city and county, as authorized by Article 5-g of the General Municipal Law. This agreement, incidentally, will obviate the necessity for a re-levy by the county of delinquent city taxes prior to the enforcement proceedings by the County. And, finally, the city may amend its charter to change the amounts of fees and interest, the collection dates and the date of return to the city.
November 15, 1972