Permits a STAR exemption for property owned by a limited liability company where the limited liability company is owned by a person to whom the exemption would have otherwise been granted.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4693
SPONSOR: Smullen
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to a real proper-
ty tax exemption for property owned by a limited liability company
 
PURPOSE OR GENERAL IDEA OF BILL:
To allow an otherwise qualified property owner to receive the STAR
(School Tax Relief) exemption on his or her primary residence if the
residence is owned by a limited liability company (LLC) which is owned
by the property owner.
 
SUMMARY OF PROVISIONS:
Section 1 amends subdivision 3 of Section 425 of the Real Property Tax
Law, which provides for the STAR exemption, by adding a new paragraph-
which adds a primary residence owned by a limited liability company to
the type of property eligible for the STAR exemption. It also provides
that such property must serve as the primary residence of one or more of
the members of the LLC and that those members who reside thereon
personally pay the real property taxes associated with the property's
ownership.
 
JUSTIFICATION:
New York State's School Tax Relief (STAR) Program provides an exemption
from school taxes for most owner-occupied, primary residences. It is
unfair to deny this benefit to an otherwise qualified taxpayer because
his or her residence is owned by a LLC of which the qualified property
taxpayer is the owner. Under interpretation of current law when an indi-
vidual who otherwise would be entitled to a STAR exemption owns his or
her primary residence as part of a LLC, the individual may not receive
the STAR exemption. In addition, current law allows that if the taxpay-
er's primary residence is not an eligible type of property (i.e. one,
two or three family residence, a farm dwelling or residential property
held in condominium or cooperative form of ownership), but a portion of
the property is partially used by the owner as a primary residence, that
portion which is used as the primary residence may be entitled to the
STAR exemption. However, this is not currently allowed if the person
owns the property through a LLC. The nature of the ownership of the
primary residence should not disqualify an otherwise qualified taxpayer
from receiving the STAR exemption. This legislation eliminates this
inequity by allowing the STAR exemption on that par t of the property
owned by a LLC which serves as the primary residence of the owners) of
the LLC.
 
PRIOR LEGISLATIVE HISTORY:
04/17/18- held for consideration in real property taxation
2019/2020- A.4820- held for consideration in real property taxation
2021/2022- A.2197- referred to real property taxation
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Minimal to the State.
 
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
4693
2023-2024 Regular Sessions
IN ASSEMBLY
February 22, 2023
___________
Introduced by M. of A. SMULLEN -- read once and referred to the Commit-
tee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to a real proper-
ty tax exemption for property owned by a limited liability company
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 3 of section 425 of the real property tax law
2 is amended by adding a new paragraph (e-1) to read as follows:
3 (e-1) Dwellings owned by a limited liability company. If legal title
4 to a dwelling is held by a limited liability company, the exemption
5 shall be granted if the property serves as the primary residence of one
6 or more of the members of the limited liability company, provided that
7 the member or members who primarily reside thereon personally pay all of
8 the real property taxes and other costs associated with the property's
9 ownership.
10 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09602-01-3