N.Y. Real Property Tax Law § 485-b: Business investment exemption

§ 485-b. Business investment exemption. 1. Real property constructed,

altered, installed or improved subsequent to the first day of July,

nineteen hundred seventy-six for the purpose of commercial, business or

industrial activity shall be exempt from taxation and special ad valorem

levies, except for special ad valorem levies for fire district, fire

protection district and fire alarm district purposes, to the extent

hereinafter provided.

2. (a) (i) Such real property shall be exempt for a period of one year

to the extent of fifty per centum of the increase in assessed value

thereof attributable to such construction, alteration, installation or

improvement and for an additional period of nine years provided,

however, that the extent of such exemption shall be decreased by five

per centum each year during such additional period of nine years and

such exemption shall be computed with respect to the "exemption base."

The exemption base shall be the increase in assessed value as determined

in the initial year of such ten year period following the filing of an

original application, except as provided in subparagraph (ii) of this

paragraph.

(ii) In any year in which a change in level of assessment of fifteen

percent or more is certified for a final assessment roll pursuant to the

rules of the commissioner, the exemption base shall be multiplied by a

fraction, the numerator of which shall be the total assessed value of

the parcel on such final assessment roll (after accounting for any

physical or quantity changes to the parcel since the immediately

preceding assessment roll), and the denominator of which shall be the

total assessed value of the parcel on the immediately preceding final

assessment roll. The result shall be the new exemption base. The

exemption shall thereupon be recomputed to take into account the new

exemption base, notwithstanding the fact that the assessor receives the

certification of the change in level of assessment after the completion,

verification and filing of the final assessment roll. In the event the

assessor does not have custody of the roll when such certification is

received, the assessor shall certify the recomputed exemption to the

local officers having custody and control of the roll, and such local

officers are hereby directed and authorized to enter the recomputed

exemption certified by the assessor on the roll. The assessor shall give

written notice of such recomputed exemption to the property owner, who

may, if he or she believes that the exemption was recomputed

incorrectly, apply for a correction in the manner provided by title

three of article five of this chapter for the correction of clerical

errors.

(iii) The following table shall illustrate the computation of the tax

exemption:

Year of exemption Percentage of exemption

1 50

2 45

3 40

4 35

5 30

6 25

7 20

8 15

9 10

10 5

(b) No such exemption shall be granted unless

(1) such construction, alteration, installation or improvement was

commenced subsequent to the first day of January, nineteen hundred

seventy-six or such later date as may be specified by local law or

resolution;

(2) the cost of such construction, alteration, installation or

improvement exceeds the sum of ten thousand dollars or such greater

amount as may be specified by local law or resolution; and

(3) such construction, alteration, installation or improvement is

completed as may be evidenced by a certificate of occupancy or other

appropriate documentation as provided by the owner.

(c) For purposes of this section the terms construction, alteration,

installation and improvement shall not include ordinary maintenance and

repairs.

(d) No such exemption shall be granted concurrent with or subsequent

to any other real property tax exemption granted to the same

improvements to real property, except, where during the period of such

previous exemption, payments in lieu of taxes or other payments were

made to the local government in an amount that would have been equal to

or greater than the amount of real property taxes that would have been

paid on such improvements had such property been granted an exemption

pursuant to this section. In such case, an exemption shall be granted

for a number of years equal to the ten year exemption granted pursuant

to this section less the number of years the property would have been

previously exempt from real property taxes.

3. Such exemption shall be granted only upon application by the owner

of such real property on a form prescribed by the commissioner. Such

application shall be filed with the assessor of the city, town, village,

or county having the power to assess property for taxation on or before

the appropriate taxable status date of such city, town, village or

county and within one year from the date of completion of such

construction, alteration, installation or improvement.

4. If the assessor is satisfied that the applicant is entitled to an

exemption pursuant to this section, he or she shall approve the

application and such real property shall thereafter be exempt from

taxation and special ad valorem levies, except for special ad valorem

levies for fire district, fire protection district and fire alarm

district purposes, as herein provided commencing with the assessment

roll prepared after the taxable status date referred to in subdivision

three of this section. The assessed value of any exemption granted

pursuant to this section shall be entered by the assessor on the

assessment roll with the taxable property, with the amount of the

exemption shown in a separate column.

5. The provisions of this section shall apply to real property used

primarily for the buying, selling, storing or developing goods or

services, the manufacture or assembly of goods or the processing of raw

materials. This section shall not apply to property used primarily for

the furnishing of dwelling space or accommodations to either residents

or transients other than hotels or motels.

6. In the event that real property granted an exemption pursuant to

this section ceases to be used primarily for eligible purposes, the

exemption granted pursuant to this section shall cease.

7. A county, city, town or village may, by local law, and a school

district, except a city school district to which article fifty-two of

the education law applies, may, by resolution, reduce the per centum of

exemption otherwise allowed pursuant to this section; provided, however,

that a project in course of construction and exemptions existing prior

in time to passage of any such local law or resolution shall not be

subject to any such reduction so effected. Any county, city, town,

village or school district that has reduced the per centum of exemption

pursuant to this subdivision may thereafter, by local law or resolution

as the case may be, increase the per centum of exemption up to any per

centum not exceeding the maximum allowed by subdivision two or twelve of

this section, whichever is applicable, provided, however, that any such

local law or resolution shall apply only to construction, alterations,

installations, or improvements commenced subsequent to the effective

date of such local law or resolution. A copy of all such local laws or

resolutions shall be filed with the commissioner and the assessor of

each assessing unit which comprises the county, city, town or school

district or, in the case of a village, the village assessor, or the

applicable town or county assessor of a village which has adopted a

local law provided in subdivision three of section fourteen hundred two

of this chapter.

8. A county, city, town or village may, by local law, and a school

district, except a city school district to which article fifty-two of

the education law applies may, by resolution, establish a date for the

commencement of effectiveness of exemptions offered pursuant to this

section and may provide that the provisions of this section shall apply

only to construction, alteration, installation or improvements having a

greater value than that specified by subdivision two of this section,

provided, however, that such amount shall not exceed fifty thousand

dollars.

9. (a) A county, city, outside the city of New York, town or village

may, by local law, and a school district which levies school taxes may,

by resolution, establish a board to be known as the industrial and

commercial incentive board. The membership and composition of such board

shall be set forth in the local law or resolution.

(b) The industrial and commercial incentive board shall present a plan

to the appointing local legislative body concerning the various types of

business real property which should be granted eligibility for an

exemption pursuant to subdivision one of this section. Such plan shall

make recommendations concerning the applicability of the exemption to

specific sectors and subsectors, as defined in the North American

Industry Classification System published by the United States

Government. Such plan shall also make a recommendation as to whether the

exemption be computed as provided in subdivision two or twelve of this

section. In addition, such plan shall identify specific geographic areas

within which such exemptions should be offered. In developing the plan

required by this paragraph, the board shall consider the planning

objectives of each municipality within which such exemptions may be

offered, the necessity of the exemption to the attraction or retention

of such business and the economic benefit to the area of providing

exemptions to various types of businesses.

(c) In addition, the board may make recommendations to the appointing

local legislative body with respect to actions it deems desirable to

improve the economic climate therein.

(d) Notwithstanding the provisions of paragraph (a) of this

subdivision, where a county establishes an industrial and commercial

incentive board, the members of such board shall be appointed as

follows: three representatives of the county: the appointment of one

shall be reserved to the county executive of the county who shall serve

as chair, and one each for the majority and the minority parties of the

county legislative body; one representative for each city located within

the county upon the recommendation of the mayor; one representative for

each of the towns located within the county upon the recommendation of

the supervisor; one representative to collectively represent all of the

villages located within the county upon the recommendation of the mayors

of the villages in the county; and one representative to collectively

represent all of the school districts located within the county upon

recommendation of the county school boards association. The members of

such board shall serve at the pleasure of the governing body which they

represent. The members shall serve without salary, but the county

legislative body may entitle each such member to reimbursement for his

or her actual and necessary expenses incurred in the performance of his

or her duties.

10. Where a county, city, town, village or school district has

established an industrial and commercial incentive board, pursuant to

subdivision nine of this section, such county, city, town or village

may, by local law, and a school district, except a city school district

to which article fifty-two of the education law applies, may, by

resolution, restrict real property eligible to receive the exemption to

real property constructed, altered, installed or improved for those

purposes identified in the plan presented by the board. Such law or

resolution shall identify the specific sectors and subsectors, as

defined in the North American Industry Classification System published

by the United States Government to which the exemption shall be

applicable. Such law or resolution shall also restrict the availability

of such exemption to the specific geographic areas identified in the

plan presented by the board.

11. Where a county, by law, restricts exemptions pursuant to the

recommendations of an industrial and commercial incentive board,

established pursuant to subdivision nine of this section, such

restricted exemptions shall be applicable to taxes and special ad

valorem levies of each city, town, village and school district located

within the area within which the restricted exemptions are offered by

the county, unless such city, town or village shall, by law, or such

school district, shall, by resolution, determine that such restricted

exemptions shall not be applicable to its tax and ad valorem levies.

Upon adoption of such law, the county shall notify each affected city,

town, village and school district of its actions and inform them of

their options regarding such restricted exemptions.

12. Notwithstanding subdivision two of this section, where a county,

city, town, village or school district adopts restricted exemptions

pursuant to subdivision ten of this section, the law or resolution may

provide that such exemptions shall be computed pursuant to the following

accelerated strategic exemption schedule:

Year of exemption Percentage of exemption

1 50

2 50

3 50

4 40

5 30

6 20

7 10

8 10

9 10

10 5

Provided however, that such law or resolution shall:

(i) contain findings that the adoption of this accelerated strategic

exemption schedule is necessary to encourage targeted economic

development, create or retain permanent private sector jobs, and that

the value of the exemptions to be provided is justified by the need to

provide employment opportunities and broaden the tax base; and

(ii) limit the applicability of such schedule to projects where the

cost of such construction, alteration, installation or improvement

exceeds the sum of fifty thousand dollars; and

(iii) provide that such exemptions are restricted by geographic areas

and/or groups and major divisions as is provided by subdivision ten of

this section.

13. The provisions of this section shall not apply in a city of one

million or more persons.