NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8688
SPONSOR: Thiele TITLE OF BILL:
An act to amend the tax law, in relation to improving the real property
tax relief credit
PURPOSE:
To improve the real property tax relief credit by (a) increasing maximum
income eligibility from $250,000 of qualified gross income to $350,000,
(b) decreasing the percentage of real property taxes over qualified
gross income from 6% to 5% to determine excess property taxes, (c)
increasing the amount of the credit, including the maximum credit from
$350 to $1,500, and making the credit permanent.
SUMMARY OF PROVISIONS:
Section 1. Amends Subparagraph (E)of paragraph 1, paragraph 2, subpara-
graphs (A),(B), and (C) of paragraph 3, paragraph 4, and subparagraph
(A) of paragraph 6 of subsection (e-2) of section 606 of the tax law by
(a) increasing maximum income eligibility from $250,000 of qualified
gross income to $350,000, (b) decreasing the percentage of real property
taxes over qualified gross income from 6% to 5% to determine excess
property taxes, (c) increasing the amount of the credit, including the
maximum credit from $350 to $1,500, and making the credit permanent.
Section 2. Effective date.
JUSTIFICATION:
One of the largest contributors to housing insecurity and loss of
affordable housing in New York State is high real property taxes. In
addition, high property taxes adversely impact the economic competitive-
ness of New York State. High property taxes have been a contributor to
the exodus of population from New York State to other regions of the
country.
The impact of high real property taxes has been exacerbated by the COVID
pandemic. The pandemic has accelerated adverse existing trends of
increasing housing costs and housing insecurity. It is imperative that
those trends be reversed in order to increase housing affordability and
security across the state. This goal can be aided by reducing the impact
of high real property taxes for families across the state.
In 2021, the State Legislature enacted Section 1 of Part III,of chapter
59 providing for a real property tax relief credit. However, the income
requirements, the cap on the credit, the three (3) year sunset
provision, and other limitations of the credit, preclude many middle
class and working class families across New York State from benefitting
from the credit. Further, the size of the credit and the cap at $350,
provides only minimal relief for many from the often crushing burden of
property taxes.
By (a) increasing maximum income eligibility for the credit from
$250,000 of qualified gross income to $350,000, (b) decreasing the
percentage of real property taxes over qualified gross income from 6% to
5% to determine excess property taxes, (c) increasing the amount of the
credit, including the maximum credit from $350 to $1,500, and making the
credit permanent, more New Yorkers will be eligible for the credit and
the level of the credit will be greater, providing real property tax
relief to working families on a permanent basis.
The impact of this legislation will be to make housing more affordable
and New York State more economically competitive.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately, and shall apply to taxable years
beginning on or after January 1, 2022.
STATE OF NEW YORK
________________________________________________________________________
8688
IN ASSEMBLY
January 10, 2022
___________
Introduced by M. of A. THIELE -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to improving the real property
tax relief credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (E) of paragraph 1, paragraph 2, subparagraphs
2 (A), (B) and (C) of paragraph 3, paragraph 4 and subparagraph (A) of
3 paragraph 6 of subsection (e-2) of section 606 of the tax law, as added
4 by section 1 of part III of chapter 59 of the laws of 2021, are amended
5 to read as follows:
6 (E) "Excess real property tax" means the excess of qualifying real
7 property taxes over [six] five percent of qualified gross income.
8 (2) For tax years beginning on or after January first, two thousand
9 [twenty-one and before January first, two thousand twenty-four] twenty-
10 two, a qualified taxpayer shall be allowed a credit as provided in para-
11 graph three of this subsection against the taxes imposed by this arti-
12 cle. If the credit exceeds the tax for such year under this article, the
13 excess shall be treated as an overpayment, to be credited or refunded,
14 without interest.
15 (A) For qualified taxpayers whose qualified gross income is seventy-
16 five thousand dollars or less, the applicable percentage shall be [four-
17 teen] twenty percent.
18 (B) For qualified taxpayers whose qualified gross income is greater
19 than seventy-five thousand dollars but less than or equal to one hundred
20 fifty thousand dollars, the applicable percentage shall be the differ-
21 ence between (i) [fourteen] twenty percent and (ii) five percent multi-
22 plied by a fraction, the numerator of which is the difference between
23 the qualified taxpayer's qualified gross income as defined by this
24 subsection and seventy-five thousand dollars, and the denominator of
25 which is seventy-five thousand dollars.
26 (C) For qualified taxpayers whose qualified gross income is greater
27 than one hundred fifty thousand dollars but less than or equal to [two]
28 three hundred fifty thousand dollars, the applicable percentage shall be
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13833-01-1
A. 8688 2
1 the difference between (i) [nine] fifteen percent and (ii) six percent
2 multiplied by a fraction, the numerator of which is the difference
3 between the qualified taxpayer's qualified gross income and one hundred
4 fifty thousand dollars, and the denominator of which is [one] two
5 hundred thousand dollars.
6 (4) [No credit shall be allowed under this subsection if the amount
7 determined pursuant to paragraph three is less than two hundred fifty
8 dollars, provided further that if] If the amount determined pursuant to
9 paragraph three is in excess of [three] fifteen hundred [fifty] dollars
10 the taxpayer shall be allowed a credit of [three] fifteen hundred
11 [fifty] dollars.
12 (A) To a property owner if qualified gross income for the taxable year
13 exceeds [two] three hundred fifty thousand dollars.
14 § 2. This act shall take effect immediately and shall apply to taxable
15 years beginning on or after January 1, 2022.
