This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

LOCAL LAWS -- Taxes and Assessments (superseding sales tax provisions)

SALES TAX -- Use (for reduction of townwide taxes within town outside village area)

MUNICIPAL HOME RULE LAW, §10(1)(ii)(a)(8); TAX LAW, §1262(c): When a town and the villages within the town all elect to receive their shares of county sales tax in cash, the town may not use its share to reduce townwide taxes in the area of the town outside villages. A town may not adopt a local law to provide that its cash share be so used.

You have asked us to advise you as to whether the Town of Cheektowaga may use its share of county sales tax revenues to reduce the townwide general fund tax levy against only those town properties located outside villages within the town. You state that the town presently uses its share of the revenues to reduce taxes levied for part-town highway purposes. For purposes of this inquiry, we assume the town and all villages within the town have elected to receive their shares of county sales tax in cash.

Tax Law, §1262(c), as amended by L 1984, ch 850, provides that, if a town and all villages within the town elect to receive their shares of county sales tax in cash, the town shall apply its share to "reduce taxes levied for part-town activities". If any balance remains, the town may apply the remainder for any of the following purposes or any combination thereof: (a) to reduce general town taxes; (b) to reduce county taxes levied in the area of the town outside the villages; or (c) to finance part-town activities. The term "part-town activities" is defined for this purpose to mean, in pertinent part, "(a)ctivities of town government, including highway programs, which are chargeable to the area of the town outside of villages ..." (Tax Law, §1262[f][4]). "General town taxes" is defined as "[t]axes levied for any town purpose, including highways, upon the entire area of a town". Thus, the reduction of townwide taxes within the area of the town outside of villages is not a purpose under section 1262(c) for which the town may use its cash share of county sales tax when all villages within the town have also elected to receive their shares in cash (see 1983 Opns St Comp No. 83-25, p 29).

Further, the levy, collection and administration of sales tax is not a matter within a town's home rule authority (see Municipal Home Rule Law, §10[1][ii][a][8]; Town of Moreau v County of Saratoga, 134 Misc 2d 380, 510 NYS2d 990 affd 142 AD2d 864, 531 NYS2d 61; 23 Opns St Comp, 1967, p 383). Therefore, in our opinion, the town may not adopt a local law superseding the provisions of section 1262 to provide that the town's cash share of county sales tax be used to reduce townwide taxes on properties outside the villages.

The town, however, may elect not to receive its share of sales tax in cash. In the event the town so elects and the villages within the town continue to elect to receive their shares in cash, "the amount allocated to the town ... shall be applied to reduce county taxes and general town taxes levied upon real property in the area of the town outside such village[s]" (emphasis added; Tax Law, §1262[c]). Therefore, in that circumstance, the town's share of county sales tax could be used to reduce townwide general fund taxes against those properties in the area of the town outside villages (Opn No. 83-25, supra).

November 2, 1993
James J. Kirisits, Esq., Town Attorney
Town of Cheektowaga