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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 (authorizing tax exemption)
REAL PROPERTY TAXES AND ASSESSMENTS -- Exemptions (authority to provide solely because property not served by water or sewer system)
SEWERS AND SEWER SYSTEMS -- Financing of (authority to provide real property tax exemptions when property not served by water or sewer system)
VILLAGES -- Powers and Duties (authority to provide real property tax exemptions when property not served by water or sewer system)
WATER SUPPLY AND DISTRIBUTION -- Financing of (authority to provide real property tax exemptions when property not served by water or sewer system)
VILLAGE LAW, §§11-1108, 11-1118, 14-1406, 14-1410; STATE CONSTITUTION, ARTICLE XVI, §1; REAL PROPERTY TAX LAW, §300: A village may not provide a partial real property tax exemption or reduction to village residents solely because those residents are not served by the village water or sewer systems.
You ask whether a village may provide a real property tax reduction to certain village residents who are not serviced by the village water or sewer system. You state that the water and sewer systems are funded entirely by user fees.1
The power to tax lies solely with the State Legislature, although this power may be delegated to legislative bodies of municipalities and "quasi-municipal corporations" (NY Const., art III, §1, art XVI, §1; see, e.g., Greater Poughkeepsie Library v Poughkeepsie, 81 NY2d 574, 579-580; 601 NYS2d 94, 97). Real Property Tax Law, §300 provides that all real property within the state is subject to taxation unless exempt therefrom by law. The term "taxation" is defined, in pertinent part, as a "charge imposed upon real property by or on behalf of a county, city, town, village or school district for municipal or school district purposes" (Real Property Tax Law, §102[20]). Taxes are imposed on the taxable assessed value of real property (see Real Property Tax Law, §§305[2], 516[2], 900, 1410[2], 1420). Article XVI, §1 of the State Constitution provides that exemptions from taxation may be granted only by general law.
Based on the foregoing, we believe it is clear that the amount needed to be raised by a village by real property taxation for all village purposes must be levied against all properties within the village, except to the extent that the State Legislature has provided for exemption from taxation (see, e.g., 1981 Opns St Comp No. 81-106, p 107; 1980 Opns St Comp, No. 80-334, p 98). The proposed reduction in real property taxes would be tantamount to the village granting a partial real property tax exemption to these properties (see, e.g., 1981 Opns St Comp No. 81-208, p 221; 1981 Opns St Comp No. 81-147, p 152; 1976 Opns St Comp, No. 76-875; unreported; 31 Opns St Comp, No. 1975, p 109).
There is no statute that authorizes a village to exempt village residents from a portion of their village real property taxes solely because the properties are not served by a village water or sewer system (see, gen., Real Property Tax Law, article 4). Moreover, in view of the express language in article XVI, §1 of the State Constitution providing that exemptions may be granted only by general law, in the absence of state enabling legislation, the provision of a real property tax exemption is not a matter within the home rule power of a local government (Opn No. 80-334, supra). Accordingly, a village may not provide a partial real property tax exemption or reduction to village residents solely because those residents are not served by the village water or sewer systems.2,
December 28, 1999
Timothy F. Moran, Esq., Village Attorney
Village of Attica
1 The cost of establishing, improving, extending and operating village water and sewer systems may be borne by general village taxes, special assessments upon the properties benefited, user fees or a combination thereof (Village Law, §§11-1108, 11-1118, 14-1406, 14-1410; General Municipal Law, §450 et seq.; 1990 Opns St Comp No. 90-41, p 92; 1987 Opns St Comp No. 87-64, p 96; see Kinkead v Village of Round Lake, 187 AD2d 905, 591 NYS2d 80; Torsoe Bros. v Board of Trustees, 49 AD2d 461, 375 NYS2d 612).
2 We note that, in the absence of a general law providing for an exemption, we would reach this conclusion even if the water or sewer system were funded by real property taxes, and not user fees. In this regard, it should be pointed out that a tax, as distinguished from a user fee or benefit assessment, is imposed for the general support of government, without regard to particular benefits received by a taxpayer (see, e.g., Watergate II Apts. v Sewer Authority, 46 NY2d 52, 412 NYS2d 821; Torsoe Bros. supra) and is not dependent upon the will or contract, express or implied, of the persons charged (see, e.g., Legum v Goldin, 55 NY2d 104, 447 NYS2d 900). There may be circumstances, however, when a municipality may be compelled to extend a water or sewer system to particular property owners who are not receiving service (see, 1993 Opns St Comp, No. 93-14, p 23 and 1979 Opns St Comp No. 79-453, unreported; cf. Riley v County of Monroe, 43 NY2d 144, 400 NYS2d 801). Also, the lack of availability of village water and sewer service may affect the assessed valuation of the properties. This, however, is a matter, in the first instance, to be determined by the appropriate assessing authority.