N.Y. Comp. Codes R. & Regs. tit. 20 § 642.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 642.2 - Imposition of the additional tax

Tax Law, § 253(2)

(a) In addition to the tax imposed by subdivision 1 of section 253 of the tax law imposes the additional tax upon the recording of each mortgage on real property located in this State, recorded on or after July 1, 1969, at a rate of 25 cents for each $100 and each remaining major fraction thereof of principal debt or obligation which is, or under any contingency may be secured at the date of execution of the mortgage or at any time thereafter.

(b)Residential property deduction.

(1) In any case where a mortgage subject to the additional tax is of real property which is principally improved or is to be principally improved by a one- or two-family residence or dwelling, the first $10,000 of principal debt to obligation secured by such mortgage shall be deducted from the total principal debt to obligation secured by such mortgage and the additional tax shall be computed on the amount remaining. Such deduction shall apply notwithstanding that part of the mortgaged property is located in one or more counties which have suspended the tax as provided in paragraph (c)(1) of this section.

(2) Proof of deduction.

(i) For purposes of claiming the deduction provided in paragraph (1) of this subdivision, there shall be submitted to the recording officer of the county where the mortgage is first recorded, either in the mortgage instrument or by separate affidavit by the mortgagor, the mortgagee or any other person who has knowledge of the facts, a statement that the real property covered by the mortgage is improved or will be improved by a one- or two-family residence or dwelling and that there are or will be no other improvements, the cost of fair market value of which exceeds or will exceed the cost of fair market value of the one- or two- family residence or dwelling. In addition to the statement submitted to the recording officer, the commissioner may require the mortgagor, the mortgagee or any other person who has knowledge of the facts to furnish by affidavit such other information or data as deemed necessary for purposes of claiming such deduction.

(ii) Where the real property covered by the mortgage contains or will contain other improvements, the cost or fair market value of which is in excess of the cost or fair market value of the one- or two-family residence or dwelling, the real property shall not be deemed to be principally improved by such one- or two-family residence or dwelling and the deduction shall not apply.

(iii) The cost of each improvement may be used to determine whether the deduction may be taken, except where the cost of any improvement is not known, then the fair market value of such improvement shall be used.

(c)Suspension of tax.

(1)

(i) Except in the counties specified in paragraph (2) of this subdivision, the imposition of the additional tax may be suspended by a county for any period of time, not less than one year, specified in a local law, ordinance or resolution duly adopted by the local legislative body of such county. A certified copy of such local law, ordinance or resolution shall be filed with the commissioner and with the State Comptroller.

(ii) The suspension of such tax shall apply only with respect to mortgages of property within such county or, where the mortgaged property is located in more than one county, to that part of the principal debt or obligation which bears the same proportion to the entire principal debt or obligation as the assessed value of such property located in such county bears to the assessed value of the entire mortgaged property.

(2) The additional tax may not be suspended in any of the following counties:

(i) counties comprising the Metropolitan Commuter Transportation District, as defined by section 1262 of the Public Authorities Law;

(ii) counties comprising the Niagara Frontier Transportation District, as defined by section 1299-b of the Public Authorities Law;

(iii) counties comprising the Rochester-Genesee Transportation District, as defined by section 1299-cc of the Public Authorities Law;

(iv) counties comprising the Capital District Transportation District, as defined by section 1302 of the Public Authorities Law; and

(v) counties comprising the Central New York Regional Transportation District, as defined by section 1327 of the Public Authorities Law.

(d)Payment of tax where mortgaged real property is situated in more than one county.

(1) The additional tax shall be paid to the recording officer of the county in which the mortgage is first recorded, notwithstanding that such county is one which has suspended the additional tax as provided in paragraph (c)(1) of this section and notwithstanding that the recording officer of such county is not required to collect any additional tax with respect to mortgaged property located in that county.

(2) Where a mortgage subject to the taxes described in this Part covers real property located in more than one county, and one or more but not all of such counties have suspended the additional tax as provided in paragraph (c)(1) of this section, the taxes as described in this Part shall be paid, at the election of the taxpayer, by one of the following procedures:

(i) Procedure 1. The taxpayer may compute the tax as if the property was located entirely in any one of such counties that it is authorized to collect the greatest amount of tax. Such amount is then paid to the recording officer of the county where the mortgage is first recorded. Such recording officer indorses upon the mortgage the tax so paid. Also, at the time the taxpayer presents the mortgage for recording and pays the tax, the taxpayer should present to the recording officer a completed form MT-15.1-Mortgage Recording Tax Claim for Refund. The taxpayer then can proceed to record the mortgage in any other county where the property or any other part thereof is located. The recording officer will submit information to the department with respect to the relative assessed values of the property located in each county, along with form MT-15.1, for the purpose of determining the proper total tax due and the amount of such tax to be apportioned to each county. If it is determined that the tax was overpaid, the commissioner, or a duly authorized delegate, will direct the appropriate recording officer to refund the amount of the overpayment to the taxpayer or his duly authorized representative. If the taxpayer fails to present a completed refund claim form (form MT-15.1) to the recording officer at the time the mortgage was first recorded, the taxpayer may file for a refund directly with the department. The refund application must be filed with the department within two years from the time that the erroneous payment of tax occurred. If there is an underpayment of the tax, the commissioner will direct the recording officer where the mortgage was first recorded and the tax paid to notify the parties to the mortgage of such underpayment.

(ii) Procedure 2. At the time the mortgage is presented for recording the taxpayer may file a completed form MT-15-Mortgage Recording Tax Return. The taxpayer will pay the amount of tax computed to be due on form MT-15, or as adjusted by the recording officer, to the recording officer of the county where the mortgage is first recorded. The recording officer will indorse the payment of the tax upon the mortgage so that the mortgage can be recorded without further payment of tax in the other county or counties. The recording officer must submit the original of the return (form MT-15), along with the information described in procedure number one, to the department. The return filed pursuant to this procedure shall be subject to audit by the department and also by the recording officer where the mortgage was first recorded and the tax paid. If there is an underpayment of the tax, the commissioner will direct the recording officer where the mortgage was first recorded and the tax paid to notify the parties to the mortgage of such underpayment. If there is an overpayment of the tax, the commissioner shall direct the appropriate recording officer to refund the amount of overpayment to the taxpayer or his duly authorized representative.

(3) Where a mortgage covers real property located partly within and partly without the State and the property within the State is in two or more counties, some but not all of which have suspended the tax as provided in paragraph (c)(1) of this section, the portion of the principal debt or obligation secured or which under any contingency may be secured by such mortgage which is subject to the taxes described in Part 642 of this Title, and which shall be used for purposes of following procedure 1 or procedure 2 as described in this section, must be determined in accordance with the provisions of Part 649 of this Title.

(4) Where the additional tax is suspended in all of the counties in which the mortgaged property is located or is in effect in all of the counties in which the mortgaged property is located, the provisions of paragraph (2) of this subdivision shall not apply and the recording officer shall compute the amount of tax due; provided, however, that the recording officer shall submit a statement to the commissioner requesting apportionment in any case where the mortgaged property is located in more than one tax district, and further provided that an application for a determination of the tax prior to recording may be made in any case where the property is located partly within and partly without the State.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 642.2