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Audit: Most property tax exemptions not properly documented

By Charles McChesney

Date:

DiNapoli

ALBANY — An audit of property tax exemptions in the Empire State found that most were not properly documented, causing other taxpayers to bear an outsized tax burden, according to an audit by the Office of the New York State Comptroller Thomas P. DiNapoli.

The comptroller’s office said it audited 10 towns in upstate New York to see how they were handling property tax exemptions for agricultural uses, senior citizens, and veterans. The towns of Callicoon, Carlisle, Chenango, Cherry Valley, Coventry, Davenport, Green, Lisle, Meredith, and Springfield were audited for 2016.

The towns were selected, the comptroller’s report said, because they had a higher percentage of the three exemptions than other towns in their counties.

Of the 1,509 exemptions reviewed, 901, or 60 percent, were somehow in error. Fully 51 percent lacked one or more documents supporting the exemption.

The audit found a variety of errors were made.

Most agricultural and senior-citizen exemptions are supposed to be renewed annually. But the audit found 71 cases where the property owner did not even ask for a renewal and the exemption was renewed automatically.

Veterans’ exemptions don’t require annual renewals. However, the audit noted that towns should still periodically check to ensure a property is still the veteran’s primary residence. The audit found the average time since the original granting of a veteran’s exemption was more than 14 years.

Not all oversights benefited the taxpayers involved. The audit found 15 veterans received exemptions worth less than they should have been granted even as 41 received veterans’ exemptions greater than they should have received.

Many towns have seen turnover in assessors, the audit report said, all of whom are supposed to verify their tax rolls are accurate. It noted that a new assessor in Carlisle (Schoharie County) completed such a verification by requesting that all property owners receiving veterans’ exemptions submit proof of eligibility. That resulted in eight properties losing their exemptions.

In all, the audit found 901 exemptions that should not have been granted. Those exemptions had a taxable value of $25 million, nearly one-tenth of the total exemptions granted and, according to the audit report, more than 5 percent of the total taxable assessed value in the 10 towns audited.

“Every exemption shifts the tax burden to the non-exempt properties,” the audit report said. 

Town governments were notified of the audit results. However, the comptroller’s office has no enforcement power, so it is up to each municipality to decide whether to fix the problem and how.

The comptroller’s office said it has offered assessors in-person and online training opportunities to address the shortcomings found in the audit.

Several towns responded to the audits, saying they were taking steps to fix things. In its response, Carlisle noted that it is important the tax levy be accurate. “Since the audit was only done in 10 towns the numbers would be staggering if all 932 towns were looked at….”

A spokesman for the comptroller’s office said the audit, which focused on rural communities in the area between Binghamton and Schenectady, could be repeated in other regions. However, he said no such audit had yet been scheduled.       

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