Downtown Improvement/Sanitary District Charges; Downtown Special Assessment District Charges Not “Taxes” for Purposes of Empire-Zone Tax Credit

The question before the Third Department was whether petitioner’s limited liability company, which was a Qualified Empire Zone Enterprise (QEZE) and therefore was entitled to claim credit for “eligible real property taxes,” could also claim credit for a “downtown improvement tax.”  The issue was whether the “downtown improvement tax” was an “eligible real property tax.”  After extensive analysis of the meaning of “tax” in this context, the Third Department, in a full-fledged opinion by Justice McCarthy, determined it was not: “By long-standing precedent, statutory relief from real property ‘taxation’ . . . was held not to apply to taxes imposed for special benefits, typically in the form of special ad  valorem levies or special assessments” … .   Matter of Piccolo v NYS Tax Appeals Tribunal, 513539, 3rd Dept, 5-2-13

In a case which raised the same “tax versus ad valorem levy” issue in the QEZE context, the Third Department determined Sanitary District charges were not “taxes” entitled to credit.  Matter of Stevenson v NYS Tax Appeals Tribunal, 513540, 3rd Dept, 5-2-13

In another case with the same QEZE “tax versus ad valorem levy” issue, the Third Department determined that “Downtown Special Assessment District Charges” were not “taxes” entitled to credit.  Matter of Herrick v NYS Tax Appeals Tribunal, 513541, 3rd Dept, 5-2-13