Matter of 125 Bar Corp. v. State Liq. Auth., 46 N.Y.2d 452 (1979)
In the context of New York City real property tax refunds, serving a certified copy of a court order reducing assessments constitutes the ‘application’ for a refund, while submitting receipted tax bills or canceled checks is considered proof of entitlement.
Summary
This case addresses the interpretation of what constitutes a timely application for a real property tax refund in New York City. The petitioner, 125 Bar Corp., sought a refund based on a court order reducing property assessments. They served the city with the order within the statutory three-year period but submitted supporting documentation (receipted tax bills) later. The city argued the application was untimely. The Court of Appeals held that serving the certified court order constituted the application, and submitting the supporting documents was a separate step to prove entitlement, thus the application was timely.
Facts
A court order was entered on September 22, 1975, stipulating a reduction in real property assessments for 125 Bar Corp. for the years 1967 through 1973. On September 13, 1978, the corporation served a certified copy of the order on the city. Later, on December 5, 1978, they submitted copies of receipted tax bills and canceled checks. The city refused the documentation, claiming the refund application was time-barred because the documentation was submitted outside the three-year statute of limitations.
Procedural History
1. 125 Bar Corp. sued to recover the taxes owed based on the 1975 order.
2. The Supreme Court granted the relief and directed a refund.
3. The Appellate Division affirmed the Supreme Court’s decision.
4. The City of New York appealed to the Court of Appeals.
Issue(s)
Whether, under New York City regulations and Real Property Tax Law § 726(3), the submission of receipted tax bills and canceled checks is a necessary component of the “application for audit and payment” of a tax refund, or whether service of a certified copy of the court order alone constitutes a sufficient application.
Holding
No, because the city’s regulation is reasonably interpreted as prescribing a two-step process: (1) serving a certified copy of the court order, which constitutes the application, and (2) submitting receipted tax bills or substitute photocopies of canceled checks to prove entitlement to the refund. The application for the tax refund was thus timely made when the certified order was served.
Court’s Reasoning
The court focused on interpreting the City’s own regulations regarding tax refunds. While the city had the power to define what constitutes an “application,” its regulations created a two-step process. The court stated: “The service is the application for the tax refund; the submission, the proof of entitlement to the refund for which application has been made.” The Court emphasized that if the City intended the application to include both the court order and the supporting documentation, it had to state that with “abundant clarity.” Because the regulation was ambiguous, it was interpreted in favor of the taxpayer. The court acknowledged the city’s right to define “application” more comprehensively in future regulations but stressed the need for clarity to properly inform taxpayers of the requirements. The Court did not find any dissenting or concurring opinions in the text provided.