From time to time Keane & Beane issues legal alerts to its clients to update them on matters of interest to clients. As you may be aware, on December 18, 2013, Governor Cuomo signed Chapter 518 of the Laws of 2013, which authorizes school districts to grant veterans a partial exemption from school taxes (“Chapter 518”). The following information is provided to assist clients and update them with regard to issues related to Chapter 518 and the obligations set forth thereunder.
Under current New York State Real Property Tax Law §458-a (“RPTL §458-a”), qualified veterans of the United States military are eligible for partial property tax exemptions (referred to as the “alternative exemption”). Until the passage of Chapter 518, however, this exemption could only be applied to municipal property taxes but not to school taxes.
Under the new law, after a public hearing or hearings, and the adoption of a resolution, school districts would be authorized to extend the existing RPTL §458-a partial property tax exemption to include school taxes for “qualified owners” of “qualifying residential real property.”
A “qualified owner” is defined as a veteran, the spouse of a veteran or the un-remarried spouse of a veteran. “Qualifying residential real property” means property owned by a qualified owner which is used exclusively for residential purposes. If a portion of a property owned by a qualified owner is used for other purposes, that portion of the property is subject to taxation, and only the residential portion is eligible for the partial exemption. The property also must be the primary residence of the veteran or un-remarried surviving spouse of the veteran. The statute also defines the survival rights of the designation as “qualified owner” in the event of the death of the veteran or un-remarried surviving spouse of the veteran.
A “veteran” for the purposes of RPTL §458-a and Chapter 518 includes the following: A person who served in the active military, naval, or air service during a period of war, or who was a recipient of the armed forces expeditionary medal, navy expeditionary medal, marine corps expeditionary medal, or global war on terrorism expeditionary medal, and who was discharged or released therefrom under honorable conditions; A person, during the period of armed conflict, December 7, 1941 to August 15, 1945, who was employed by or served satisfactorily with various governmental agencies and/or services, which are enumerated in the text of RPTL §458-a, or who was discharged or released from that service under honorable conditions; and A person who is a member of the reserve components of the armed forces of the United States who received an honorable discharge or release therefrom under honorable conditions, but is still a member of the reserve components of the armed forces of the United States, and meets all other qualifications under the provisions of RPTL §458-a. Under RPTL §458-a, a “period of war” includes the Spanish-American war, the Mexican border period, World War I, World War II, the hostilities known as the Korean war, the hostilities known as the Vietnam war, and the hostilities known as the Persian Gulf conflict.
If the board of education does adopt a resolution extending the alternative veterans’ tax exemption to school taxes, then the provisions of RPTL §458-a will go into effect. RPTL §458-a sets out three (3) separate property tax exemptions to which veterans may be entitled.
The first exemption, commonly referred to as the “time of war” exemption, provides qualified veterans with a property tax exemption equal to fifteen percent of the assessed value of the property, but sets a maximum exemption value at the lesser of (a) twelve thousand dollars ($12,000.00) or (b) the product of twelve thousand dollars ($12,000.00) multiplied by the latest state equalization rate of the applicable municipality.
Veterans who served in a combat theatre or combat zone of operations, as documented by the award of a United States campaign ribbon or service medal, or veterans who received the armed forces expeditionary medal, navy expeditionary medal, marine corps expeditionary medal, or global war on terrorism expeditionary medal, may be entitled to an additional exemption (“combat zone” exemption) of ten percent of the assessed value of the property, but sets a maximum exemption value at the lesser of (a) eight thousand dollars ($8,000.00) or (b) the product of eight thousand dollars ($8,000.00) multiplied by the latest state equalization rate of the applicable municipality.
Third, the statute provides a “disability exemption,” that is, for veterans with a service connected disability (defined as with respect to disability or death, that such disability was incurred or aggravated, or that the death resulted from a disability incurred or aggravated, in line of duty in the active military, naval or air service) who have received a “compensation rating” from the United States veterans’ administration or the United States Department of Defense, the statute provides an additional exemption equal to the product of the assess value of the property multiplied by fifty percent (50%) of the veteran’s compensation rating, up to a maximum exemption amount of forty thousand dollars ($40,000.00). The statute indicates that, for a person who served in the active military, naval or air service during a period of war and died in service of a service connected disability, such person shall be deemed to have been assigned a compensation rating of one hundred percent (100%).
These three exemptions together constitute the RPTL §458-a alternative veterans’ tax exemption. If a board of education does extend the alternative veterans’ tax exemption, it extends the “time of war,” “combat zone,” and “disability” exemptions. Not all veterans will be eligible for each of these exemptions. To the extent a veteran is eligible for more than one of these exemptions, the exemptions are cumulative.
It is also important to note that under RPTL §458-a, a school district is permitted to adopt a resolution (referred to in the statute as a “local law”) either reducing or increasing the maximum exemptions allowable in accordance with statutorily set amounts. However, this action must be taken separately, after a public hearing, and after the determination by the board of education to extend the school tax exemption to qualified veterans. It should also be noted that RPTL §458-a permits “high appreciation” municipalities to increase the maximum exemptions allowable beyond other municipalities.
In addition, the board of education may also extend the definition of “qualified owner” to include “Gold Star Parents.” For the purposes of RPTL §458-a and Chapter 518, a “Gold Star Parent” is the parent of a child who died in the line of duty while serving in the United States armed forces during a period of war. If the board of education wants to extend the definition of “qualified owner” to include “Gold Star Parents,” this action must also be done separately from the adoption of the exemption and a public hearing concerning adding “Gold Star Parents” is required before adopting a resolution that incorporates “Gold Star Parents” into the definition.
An individual’s application for the alternative veterans’ exemption is due on or before the taxable status date of the tax assessing authority. For school districts in Westchester County, the taxable status date is generally May 1. For school districts outside of Westchester County, the taxable status date is generally March 1. If the local tax assessing authority already offers the alternative veterans’ exemption, then no action is required on the part of the individual taxpayer.
RPTL §458-a does not specifically include the date by which a school board must take action to extend the veterans’ exemption, if it is going to do so. We advise you to contact your local assessor’s office and to work together with the assessor to ensure proper and timely implementation. Bear in mind, as mentioned above, that an individual’s application is due on the taxable status date, either March 1 or May 1, depending upon jurisdiction.
Should a school district wish to extend the alternative veterans’ tax exemption, there are a number of important considerations, including whether the district intends to reduce or increase the maximum exemptions allowable. This determination should involve discussions among both the members of the board of education and members of the public; therefore, the requirement of a public hearing.
Should you have any questions, or would like us to draft a resolution for your board of education’s consideration, please feel free to contact this office. Also, please distribute this Legal Alert to members of the Board of Education and your school business official.