Volume 5 - Opinions of Counsel SBEA No. 77
Correction of errors (omitted assessments) (taxable parcel erroneously granted exemption) - Real Property Tax Law, §§ 551, 553:
Where a parcel was erroneously given exempt status on the prior year’s assessment roll, the assessor may enter it on the taxable portion of the current roll prior to the tentative completion thereof in accordance with the provisions of section 551 of the Real Property Tax Law. Similarly, pursuant to section 553 of such law, the board of assessment review may correct a final assessment roll by adding thereto the valuation of real property erroneously omitted from either the preceding or current assessment roll. However, after taxes have been levied, this error may not be corrected, except on the subsequent assessment roll in accordance with the procedure referred to above.
Our opinion has been requested as to whether or not a tax levying body may “remove an exemption erroneously placed on a parcel.”
The relevant statute is section 551 of the Real Property Tax Law which provides as follows:
§ 551. Entry by assessor of omitted real property on current assessment roll
1. The assessor of any assessing unit, upon his own motion or upon the application of any taxpayer therein, shall enter on the assessment roll of the current year, prior to the tentative completion thereof, any parcel of real property shown to have been omitted from the assessment roll of the preceding year, at the valuation of that year, or if not then valued, at such valuation as the assessor shall determine for the preceding year, except that special franchise assessments after apportionment thereof by the assessor, if necessary, shall be entered at the valuation determined by the state board.
2. For purposes of this section, in addition to a wholly omitted parcel, taxable real property shall be deemed to have been omitted if entered on the roll of the preceding year as exempt real property or if omitted from the roll of the preceding year as a result of an essential error in fact as defined in paragraph (d) of subdivision three of section five hundred fifty.
3. Real property assessed pursuant to this section shall be taxed at the tax rate or tax rates for the preceding year. The amount of tax or taxes levied pursuant to this section shall be deducted from the aggregate amount of taxes to be levied for the current year. (emphasis supplied)
This section specifically states that omitted real property may be placed on the assessment roll for the current year if it was entered on the roll of the preceding year as exempt real property.
Section 553 of the Real Property Tax Law provides for correction of final assessment rolls, upon petition of the assessor to the board of assessment review, for all types of errors including omissions. Subdivisions l(c) and(d) of section 553 of the Real Property Tax Law provide that the following omissions may be corrected:
(c) an omission from the assessment roll for the preceding year of the assessed valuation of taxable real property;
(d) an omission from the assessment roll for the current year of the assessed valuation of taxable real property;
These sections clearly indicate that the board of assessment review may correct a final roll by adding the valuation of real property omitted from the assessment roll of the current year or preceding year including omitted improvements and property omitted as wholly exempt.
After levy of taxes, errors involving wholly exempt real property may not be corrected except by placing such omitted property on the assessment roll in the following year. Section 554 and section 556 which pertain to the correction of tax bills and refunds of erroneous taxes specifically exclude correction of unlawful entries as defined in section 550, subdivision 6(a) i.e., “an entry on the taxable portion of the assessment roll, or tax roll, or both, of the assessed valuation of real property which, except for the provisions of section four hundred ninety of this chapter, is wholly exempt from taxation. . . .”
The drafters of the Correction of Errors Law deliberately excluded this type of error from the correction provisions of section 554 and section 556. It was felt that the changes in the taxable status of real property from exempt to taxable and vice versa by a tax levying body would result in needless controversy and confusion long after taxable status date had passed and tax bills had been sent out. One of the basic concepts of the Real Property Tax Law system is that taxable status, with regard to the exemption or nonexemption of property, should be determined as of a given date in each taxable year (taxable status date) long before the actual levy of taxes upon the property involved. Leaving the question of taxable status open until levy of taxes would create needless uncertainty in determination of the total taxable real property in a given taxing jurisdiction. Furthermore, local taxation and assessment officials would be vulnerable to constant harassment by disgruntled taxpayers seeking exemption throughout the tax year.
May 12, 1976
NOTE: This Opinion modified by Opinion 10-84.