NY State Senate Bill 2023-S1539

Senate Bill S1539

2023-2024 Legislative Session

Enables any city having a population of one million or more to impose and collect taxes on vacant ground floor commercial premises

download bill text pdf

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to investigations and government operations
Jan 12, 2023	referred to investigations and government operations

2023-S1539 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Add §1201-f, Tax L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S5686
2021-2022: S83

2023-S1539 (ACTIVE) - Summary

Enables any city having a population of one million or more to impose and collect taxes on vacant ground floor commercial premises.

2023-S1539 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1539

SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:

An act to amend the tax law, in relation to enabling any city having a
population of one million or more to impose and collect taxes on vacant
ground floor commercial premises

 
SUMMARY OF SPECIFIC PROVISIONS:

The bill creates a new section 1201-f of the Tax Law entitled "Commer-
cial vacancy tax."

Subdivision (a) of the new section authorizes any city having a popu-
lation of one million or more to adopt a local law imposing a tax on
vacant ground floor commercial premises. This subdivision establishes
both a minimum period of vacancy (six months) before any premises would
be subject to the tax and a maximum amount of tax (two thousand dollars
per square foot annually). It authorizes the local law to establish
different rates of tax in different geographical areas of any such city
and provides that the owner of the premises is liable for payment of the
tax.

Subdivision (b) of the new section provides that the local law would
define the meaning of the term "vacancy", subject to a specific
exemption for premises or buildings for which construction documents
have been filed with the Department of Buildings of any such city.

Subdivision (c) of the new section provides that the local law may
establish additional exemptions or exclusions.

Subdivisions (d) and (f) through (j) of the new section relate to the
administration, collection and enforcement of the tax, including review
for error, illegality or unconstitutionality at the Tax Appeals Tribunal
of any such city and then by an Article 78 proceeding.

Subdivision (e) of the new section provides that a vacancy shall not be
deemed to have begun until at least thirty days after an owner of ground
floor commercial premises was required to register such premises in
accordance with a local law establishing a vacancy registration require-
ment.

Subdivision (k) of the new section is a severability clause.

Section 2 of the bill is the effective date.

 
JUSTIFICATION:

An active and diverse commercial streetscape is the wellspring of New
York City's vibrancy. In recent years, many of the city's neighborhoods
have seen their vibrancy stifled by a sharp uptick in storefront vacan-
cy, coupled with historically high retail asking rents. Both of these
changes are occurring against a backdrop of major upheaval in the retail
industry where physical stores are taking on a different role in consum-
er shopping. In each of the five boroughs, we find storefronts that have
remained vacant for years on end despite substantial demand from a wide
range of retail tenants. Some landlords have done their best to make
adjustments to a retail market in flux. However, others have refused to
accept tenants who are ready to enter into a lease, instead holding out
for even-higher rent levels or waiting for a deep-pocketed national
chain to come along. While neither scenario is guaranteed to materialize
for the landlords, in the meantime, communities are all but assured to
be blighted by darkened storefronts, unkempt pedestrian rights of way,
and accumulations of snow and ice, all while local businesses get pushed
out of neighborhoods where they have been fixtures for years.

For this reason, the City of New York seeks authorization to enact a tax
on ground floor commercial premises that have remained vacant for no
less than six months. The tax will incentivize landlords with vacant
space and options to lease the space to tenants to take advantage of
those options, restoring vibrancy to the city's streetscapes. The City
would be able to create exemptions from the tax; for example, for prop-
erties in areas with exceptionally weak retail demand or in zones of
historic disinvestment. At the same time, all landlords would be
directed to the City's broad offering of small business support
programs.

Vibrant, safe, and livable streets - along with the diverse array of
businesses that line them - are the lifeblood of New York City. We need
to ensure that everyone plays their part in making our streetscape the
best it can be for New York's residents, workers, and visitors.

 
PRIOR LEGISLATIVE HISTORY:

S.0083 of 2021-2022 (Hoylman): Died in Investigations and Government
Operations

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect thirty days after the commissioner of finance
for a city with a population of one million or more submits a report
required by a local law establishing a vacancy registration requirement
to the mayor, the speaker of the council and the comptroller-of such
city. Such commissioner of finance shall notify the legislative bill
drafting commission upon submission of such report in order that the
commission may maintain an accurate and timely effect data base of the
official text of the laws of the state of New York in furtherance of
effectuating the provisions of section 44 of the legislative law and
section 70-b of the public officers law.

2023-S1539 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1539
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 12, 2023
                                ___________
 
 Introduced  by Sen. HOYLMAN-SIGAL -- read twice and ordered printed, and
   when printed to be committed to the Committee  on  Investigations  and
   Government Operations
 
 AN  ACT  to amend the tax law, in relation to enabling any city having a
   population of one million or more  to  impose  and  collect  taxes  on
   vacant ground floor commercial premises

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The tax law is amended by adding a new  section  1201-f  to
 read as follows:
   §  1201-F.  COMMERCIAL  VACANCY  TAX.  (A)  NOTWITHSTANDING  ANY OTHER
 PROVISION OF LAW TO THE CONTRARY, ANY CITY HAVING A  POPULATION  OF  ONE
 MILLION  OR  MORE  IS HEREBY AUTHORIZED AND EMPOWERED TO ADOPT AND AMEND
 LOCAL LAWS IMPOSING IN ANY SUCH CITY A TAX SUCH AS THE  LEGISLATURE  HAS
 OR  WOULD  HAVE  THE  POWER  AND AUTHORITY TO IMPOSE ON ANY GROUND FLOOR
 COMMERCIAL PREMISES THAT HAVE BEEN VACANT FOR A PERIOD OF NOT LESS  THAN
 SIX  MONTHS.  THE  TAX  ON  SUCH VACANT GROUND FLOOR COMMERCIAL PREMISES
 SHALL BE MEASURED AS DETERMINED AND  CALCULATED  IN  ACCORDANCE  WITH  A
 FORMULA  OR  FORMULAS SET FORTH IN ANY SUCH LOCAL LAW, PROVIDED THAT ANY
 SUCH TAX SHALL NOT EXCEED TWO THOUSAND DOLLARS PER SQUARE FOOT ANNUALLY.
 ANY SUCH LOCAL LAW MAY IMPOSE SUCH TAX AT DIFFERENT RATES  IN  DIFFERENT
 GEOGRAPHICAL  AREAS  OF  ANY SUCH CITY. SUCH TAX SHALL BE IMPOSED ON THE
 OWNER OF SUCH PREMISES.
   (B) ANY SUCH LOCAL LAW SHALL DEFINE THE MEANING OF THE  TERM  VACANCY,
 PROVIDED  THAT GROUND FLOOR COMMERCIAL PREMISES THAT ARE NOT OCCUPIED BY
 A TENANT, BUT FOR WHICH CONSTRUCTION DOCUMENTS  FOR  THE  ALTERATION  OR
 RENOVATION  OF  SUCH  PREMISES  HAVE  BEEN  FILED WITH THE DEPARTMENT OF
 BUILDINGS OF ANY SUCH CITY, OR ARE LOCATED IN REAL  PROPERTY  FOR  WHICH
 CONSTRUCTION  DOCUMENTS  FOR  THE  ALTERATION OR RENOVATION OF SUCH REAL
 PROPERTY HAVE BEEN FILED WITH THE DEPARTMENT OF BUILDINGS  OF  ANY  SUCH
 CITY,  WHICH ALTERATION OR RENOVATION WOULD RENDER SUCH PREMISES UNINHA-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05376-01-3

 S. 1539                             2
 
 BITABLE, SHALL BE DEEMED NOT TO BE VACANT UNTIL THE EARLIER OF: (1)  ONE
 YEAR  FROM  THE  FILING OF SUCH CONSTRUCTION DOCUMENTS; OR (2) ONE MONTH
 FOLLOWING THE COMPLETION OF SUCH  ALTERATION  OR  RENOVATION.  ANY  SUCH
 LOCAL  LAW  SHALL  DEFINE  ANY OTHER TERMS NECESSARY FOR THE IMPOSITION,
 ADMINISTRATION, COLLECTION AND ENFORCEMENT OF SUCH TAX.
   (C) ANY SUCH LOCAL LAW MAY PROVIDE FOR EXCLUSIONS OR  EXEMPTIONS  FROM
 SUCH TAX OTHER THAN THOSE SPECIFIED IN THIS SECTION.
   (D)  ANY  SUCH LOCAL LAW MAY PROVIDE FOR THE FILING OF RETURNS AND THE
 PAYMENT OF THE TAX ON A MONTHLY BASIS OR ON THE BASIS OF ANY  LONGER  OR
 SHORTER PERIOD OF TIME.
   (E)  FOR  PURPOSES  OF  MEASURING  THE APPLICABLE PERIOD OF VACANCY, A
 VACANCY SHALL NOT BE DEEMED TO HAVE BEGUN UNTIL  AT  LEAST  THIRTY  DAYS
 FOLLOWING THE DATE BY WHICH AN OWNER OF GROUND FLOOR COMMERCIAL PREMISES
 WAS  FIRST REQUIRED TO REGISTER SUCH PREMISES WITH THE APPLICABLE AGENCY
 OF SUCH CITY IN ACCORDANCE WITH  A  LOCAL  LAW  ESTABLISHING  A  VACANCY
 REGISTRATION REQUIREMENT.
   (F)  SUCH  TAX MAY BE IMPOSED, ADMINISTERED, COLLECTED AND ENFORCED BY
 THE COMMISSIONER OF FINANCE OF SUCH CITY  BY  SUCH  MEANS  AND  IN  SUCH
 MANNER  AS OTHER TAXES THAT ARE NOW IMPOSED, ADMINISTERED, COLLECTED AND
 ENFORCED BY SUCH COMMISSIONER IN ACCORDANCE WITH THE CHARTER OR ADMINIS-
 TRATIVE CODE OF ANY SUCH CITY OR AS OTHERWISE MAY  BE  PROVIDED  BY  ANY
 SUCH LOCAL LAW.
   (G) ANY FINAL DETERMINATION OF THE AMOUNT OF ANY TAX PAYABLE HEREUNDER
 SHALL  BE REVIEWABLE FOR ERROR, ILLEGALITY OR UNCONSTITUTIONALITY OR ANY
 OTHER REASON WHATSOEVER BY A PROCEEDING UNDER ARTICLE  SEVENTY-EIGHT  OF
 THE  CIVIL PRACTICE LAW AND RULES IF APPLICATION THEREFOR IS MADE TO THE
 SUPREME COURT WITHIN FOUR MONTHS AFTER THE GIVING OF THE NOTICE OF  SUCH
 FINAL  DETERMINATION,  PROVIDED, HOWEVER, THAT ANY SUCH PROCEEDING UNDER
 ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES SHALL  NOT  BE
 INSTITUTED BY A TAXPAYER UNLESS:  (1) THE AMOUNT OF ANY TAX SOUGHT TO BE
 REVIEWED,  WITH  SUCH  INTEREST AND PENALTIES THEREON AS MAY BE PROVIDED
 FOR BY LOCAL LAW OR REGULATION, SHALL BE FIRST DEPOSITED  AND  THERE  IS
 FILED  AN UNDERTAKING, ISSUED BY A SURETY COMPANY AUTHORIZED TO TRANSACT
 BUSINESS IN THIS STATE AND APPROVED BY THE SUPERINTENDENT  OF  FINANCIAL
 SERVICES OF THIS STATE AS TO SOLVENCY AND RESPONSIBILITY, IN SUCH AMOUNT
 AS  A  JUSTICE  OF THE SUPREME COURT SHALL APPROVE TO THE EFFECT THAT IF
 SUCH PROCEEDING BE DISMISSED OR THE TAX CONFIRMED THE TAXPAYER WILL  PAY
 ALL  COSTS  AND  CHARGES  WHICH  MAY  ACCRUE  IN THE PROSECUTION OF SUCH
 PROCEEDING; OR (2) AT THE OPTION OF THE TAXPAYER SUCH UNDERTAKING MAY BE
 IN A SUM SUFFICIENT TO COVER THE TAXES, INTEREST AND PENALTIES STATED IN
 SUCH DETERMINATION PLUS THE COSTS AND CHARGES WHICH MAY  ACCRUE  AGAINST
 SUCH  TAXPAYER  IN THE PROSECUTION OF THE PROCEEDING, IN WHICH EVENT THE
 TAXPAYER SHALL NOT BE REQUIRED TO PAY SUCH TAXES, INTEREST OR  PENALTIES
 AS A CONDITION PRECEDENT TO THE APPLICATION.
   (H) WHERE ANY TAX IMPOSED HEREUNDER SHALL HAVE BEEN ERRONEOUSLY, ILLE-
 GALLY  OR  UNCONSTITUTIONALLY  COLLECTED  AND APPLICATION FOR THE REFUND
 THEREOF DULY MADE TO THE PROPER FISCAL OFFICER  OR  OFFICERS,  AND  SUCH
 OFFICER  OR  OFFICERS  OR,  IN THE CASE OF A CITY OF ONE MILLION OR MORE
 WHICH HAS ESTABLISHED A TAX APPEALS TRIBUNAL, SUCH TAX APPEALS TRIBUNAL,
 SHALL HAVE MADE A DETERMINATION DENYING SUCH REFUND, SUCH  DETERMINATION
 SHALL  BE  REVIEWABLE BY A PROCEEDING UNDER ARTICLE SEVENTY-EIGHT OF THE
 CIVIL PRACTICE LAW AND RULES, PROVIDED, HOWEVER, THAT SUCH PROCEEDING IS
 INSTITUTED WITHIN FOUR MONTHS AFTER THE GIVING OF  THE  NOTICE  OF  SUCH
 DENIAL,  THAT  A FINAL DETERMINATION OF TAX DUE WAS NOT PREVIOUSLY MADE,
 AND THAT AN UNDERTAKING IS FILED WITH THE PROPER FISCAL OFFICER OR OFFI-
 CERS IN SUCH AMOUNT AND WITH SUCH SURETIES AS A JUSTICE OF  THE  SUPREME
 S. 1539                             3
 
 COURT  SHALL  APPROVE TO THE EFFECT THAT IF SUCH PROCEEDING BE DISMISSED
 OR THE TAX CONFIRMED, THE TAXPAYER WILL PAY ALL COSTS AND CHARGES  WHICH
 MAY ACCRUE IN THE PROSECUTION OF SUCH PROCEEDING.
   (I)  EXCEPT IN THE CASE OF A WILLFULLY FALSE OR FRAUDULENT RETURN WITH
 INTENT TO EVADE THE TAX, NO ASSESSMENT OF ADDITIONAL TAX SHALL  BE  MADE
 AFTER  THE  EXPIRATION  OF  MORE  THAN  THREE YEARS FROM THE DATE OF THE
 FILING OF A RETURN, PROVIDED, HOWEVER, THAT WHERE  NO  RETURN  HAS  BEEN
 FILED AS PROVIDED BY LAW THE TAX MAY BE ASSESSED AT ANY TIME.
   (J)  REVENUES  RESULTING FROM THE IMPOSITION OF TAX AUTHORIZED BY THIS
 SECTION SHALL BE PAID INTO THE TREASURY OF ANY SUCH CITY  AND  SHALL  BE
 CREDITED TO AND DEPOSITED IN THE GENERAL FUND OF ANY SUCH CITY.
   (K) IF ANY PROVISION OF THIS SECTION OR THE APPLICATION THEREOF TO ANY
 PERSON  OR  CIRCUMSTANCE  SHALL  BE  HELD INVALID, THE REMAINDER OF THIS
 SECTION AND THE APPLICATION  OF  SUCH  PROVISION  TO  OTHER  PERSONS  OR
 CIRCUMSTANCES SHALL NOT BE AFFECTED THEREBY.
   §  2. This act shall take effect thirty days after the commissioner of
 finance for a city with a population of one million or  more  submits  a
 report  required  by  a  local  law  establishing a vacancy registration
 requirement to the mayor, the speaker of the council and the comptroller
 of such city. Such commissioner of finance shall notify the  legislative
 bill  drafting  commission  upon  the submission of such report in order
 that the commission may maintain an accurate and timely  effective  data
 base of the official text of the laws of the state of New York in furth-
 erance  of  effectuating the provisions of section 44 of the legislative
 law and section 70-b of the public officers law.

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