BILL NUMBER:S6347

TITLE OF BILL:  An act to amend the real property tax law, in relation
to a real property tax exemption for property owned by a limited
liability company

PURPOSE:  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
e-1 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,

EXISTING LAW:  Real property owned by a LLC is not eligible for a STAR
exemption

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 individual 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 taxpayer'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 part of the property owned by a LLC which
serves as the primary residence of the owner(s) of the LLC.

LEGISLATIVE HISTORY: This is a new bill

FISCAL IMPLICATIONS: Minimal to the State.

LOCAL FISCAL IMPLICATIONS: None.


EFFECTIVE DATE: Immediately.