Barclay Damon
Barclay Damon

Legal Alert

Mortgage Recording Tax Exemptions From Industrial Development Agencies

In follow up to our prior legal alert (see below) regarding a postponement of the effective date of a law curtailing industrial development agencies’ authority to grant a mortgage recording tax exemption; please be advised that the Governor signed an amendment extending the effective date of the law to July 1, 2017. The amendment takes effect immediately.

By a law effective September 30, 2016, industrial development agencies (“IDAs”) in New York State lost the authority to grant mortgage recording tax exemptions on that portion of the mortgage recording tax, if any, allocated to regional transportation districts within the State. The Governor requested that the Legislature extend the effective date of this law from September 30, 2016 to July 1, 2017.

An amendment to extend the effective date to July 1, 2017 was adopted by the Assembly on January 10, 2017 and is now pending before the Senate. We will issue another update when the Senate takes action on the amendment.

The State Department of Taxation and Finance issued guidance in November indicating that borrowers must pay the applicable portion of the mortgage recording tax until the effective date of the law is amended. If the effective date is changed to July 1, 2017, we expect the State Department of Taxation and Finance to issue guidance on how to apply for a refund for the portion of the tax paid prior to July 1, 2017.
If you would like further information or have any questions with respect to the impact of this alert on your organization, please contact  Jean Everett at (202) 582-0601 or jeverett@barclaydamon.com, Susan Katzoff at (315) 425-2880 or skatzoff@barclaydamon.com or Melissa Bennett at (518) 429-4219 or mbennett@barclaydamon.com.