N.Y. Real Property Tax Law § 726: Refund of taxes

§ 726. Refund of taxes. 1. If in a final order in any proceeding under

this article it is determined that the assessment reviewed was

excessive, unequal or unlawful, or that real property was misclassified,

and ordered or directed that the same be corrected or stricken from the

roll, and such order is not made in time to enable the assessors or

other appropriate officer, board or body to make a new or corrected

assessment or to strike such assessment from the roll prior to the

imposing of any tax or special ad valorem levy upon the real property

the assessment of which has been determined to be excessive, unequal or

unlawful, or which has been determined to be misclassified, then any

amount at any time collected upon such excessive, unequal or unlawful

assessment, or as a result of such misclassification shall be refunded

as follows:

(a) When such tax or other levy shall have been imposed by the board

of supervisors, there shall be audited and paid to the petitioner or

other person paying such tax or other levy in the same manner as county

charges, the amount paid by him in excess of the amount which would have

been paid had such assessment been made as determined by such order,

together with interest thereon as provided in subdivision two of this

section. So much of any tax or other levy, including interest thereon,

as shall be refunded which was imposed for city, town, village or

special district purposes, shall be charged to such city, town, village

or special district. So much of the amount of any tax or other levy,

including interest thereon, as shall be refunded which was imposed for

other than city, town, village or special district purposes, shall be a

general county charge; provided, however, that if the assessment is

reduced by such order by an amount not in excess of ten thousand

dollars, such portion of the amount refunded shall be charged to the

city or town in which the real property is situated. However, with

regard to condominiums, the amount paid by the petitioner or other

person paying such tax, in excess of the amount which would have been

paid had such assessment been made, as determined by such order, for

assessments other than city, town, village or special district purposes,

shall not be a city or town charge regardless of the amount of the

reduction in the assessment.

(b) When such tax or other levy shall have been imposed by the

appropriate board or body of any city, town or village, there shall be

audited and paid to the petitioner or other person paying such tax or

other levy in the same manner as city, town or village charges, as the

case may be, the amount paid by him in excess of the amount which would

have been paid had the assessment been made as determined by such order,

together with interest thereon as provided in subdivision two of this

section. So much of any tax or other levy, including interest thereon,

as shall be refunded which was imposed for city, town, village or

special district purposes, shall be charged to such city, town, village

or special district. So much of the amount of any tax or other levy,

including interest thereon, as shall be refunded which was imposed for

other than city, town, village or special district purposes, shall be a

general county charge; provided, however, that if the assessment is

reduced by such order by an amount not in excess of ten thousand

dollars, such portion of the amount refunded shall be charged to the

city or town in which the real property is situated. However, with

regard to condominium owners, the amount paid by the petitioner or other

person paying such tax, in excess of the amount which would have been

paid had such assessment been made, as determined by such order, for

assessments other than city, town, village or special district purposes,

shall not be a city or town charge regardless of the amount of the

reduction in the assessment.

(c) Any final order in a proceeding under article seven of this

chapter, which orders or directs the correction or striking of an

assessment appearing on that portion of a city, town or county

assessment roll applicable to a school district, shall be binding on

such school district. Any amount of taxes of such school district at any

time collected upon such assessment in excess of the amount which would

have been paid had such assessment been made as determined by such

order, shall be refunded by the school authorities of such school

district, together with interest thereon computed as provided in

subdivision two of this section. A school district which levies taxes on

behalf of a school district public library, association library,

municipal public library, or special district public library may charge

back to such library the portion of such refund attributable to library

purposes. Such refund shall be made in accordance with the procedure set

forth in this section, provided, however, that application for such

refund shall be made, by the petitioner or other person paying such tax,

within three years after the entry of the final order ordering or

adjudging or determining such assessment to have been excessive, unequal

or unlawful, or that real property was misclassified. The time of the

pendency of any appeal in any such proceeding or from any such order

shall not be deemed part of such three years.

* 2. Interest shall be paid on the amount of any refund made pursuant

to this section, computed from the date of payment of the tax or other

levy or portion thereof refunded; provided, however, that interest on

the amount of any such refund for the period after any final order

determining the assessment reviewed to be excessive, unequal or

unlawful, or determining that real property was misclassified,

notwithstanding that an appeal in the proceeding or from such order may

be pending, shall be paid only from the date that application for audit

and payment of such refund shall have been duly made to the appropriate

fiscal officer or body. Such rate of interest shall be the overpayment

rate set by the commissioner of taxation and finance pursuant to

subsection (j) of section six hundred ninety-seven of the tax law and

such interest rate shall not be greater than nine percent per annum.

Provided, the interest rate of the first calendar quarter set forth in

the first month of the calendar year shall be the annual interest rate,

and shall be the rate of interest prescribed by this subdivision. If, as

a result of an appeal, there shall be an increase in the amount to be

refunded, for the purposes of computing the interest thereon the

determination upon such appeal shall be deemed a determination only with

respect to such increase.

* NB Applies to interest chargeable on or after April 1, 2003

3. Application for the audit and payment of a tax or other levy paid

upon an assessment determined upon final order to be excessive, unequal

or unlawful, or paid upon an assessment of real property determined upon

final order to be misclassified, must be made to the proper fiscal

officer or body by the petitioner or other person paying such taxes

within three years after the entry of such order; provided, however,

that the time of the pendency of any appeal in any such proceeding or

from any such order shall not be deemed any part of such three years.

4. Provision for the payment of all amounts charged to a city, town,

village, school district or special district pursuant to paragraphs (a),

(b) and (c) of subdivision one of this section, shall be included in the

next annual budget or estimate of such city, town, village, school

district or special district; provided, however, that in the event the

aggregate amount charged to any city, town, village, school district or

special district pursuant to paragraphs (a), (b) and (c) of subdivision

one of this section for any fiscal year exceeds twenty-five thousand

dollars or if such amount exceeds one per centum of the full valuation

thereof, such amount may be financed, in whole or in part, in the same

manner as a final judgment against such city, town, village, school

district or special district. Full valuation shall mean the valuation

obtained by dividing the assessed valuation, as shown on the last

completed assessment roll for which a state equalization rate has been

established, by such state equalization rate. If a town shall issue

obligations to finance the payment, in whole or in part, of the

aggregate amount so charged back to such town for any fiscal year, taxes

or other levies required for payment of the principal of an interest on

such obligations shall be imposed in the first instance upon the entire

town or such parts thereof, in the same proportion and manner, as the

taxes or other levies refunded and included in such aggregate amount

were imposed upon the entire town or such parts thereof.

5. (a) If the parties have so agreed, a final order may provide that a

refund which is payable pursuant to this section shall be paid in

installments over a specified period, not to exceed five years. The

order may further provide, if the parties have so agreed, that interest

shall be paid on such installments, at the rate provided by this

section. Each such installment shall be audited, paid and charged back

in the manner provided by this section.

(b) Notwithstanding any agreement of the parties to the contrary, in

no event shall an excessive, unlawful or unequal assessment be reduced

by more than is necessary to correct an excessive, unlawful or unequal

assessment, or reapportioned by more than is necessary to correct a

misclassification, so as to avoid paying a refund pursuant to this

section.