MIDBORO MANAGEMENT
A new law affecting every cooperative, condominium and homeowner association in New York State that owns a commercial parking facility went into effect on February 6, 2001.
The legislation eliminates for any owner occupants all parking related taxes in residential buildings (other than rental), that operate a parking garage. The savings can be very significant. For example, Midboro Management has a good number of co-ops on both the upper East and upper West sides that lease out their parking garages to commercial operators. Any resident owner who rents a parking spot in such a garage was being charged 4% New York State tax, all local taxes, the ¼% metropolitan commuter transportation district tax and the 6% municipal assistance corporation parking tax imposed in New York City. The resident owner who occasionally parked there was being charged an additional 8% Manhattan parking tax - applicable unless they filed an application with the NYC Department of Finance for Manhattan resident parking tax exemption and received a parking tax exemption certificate. Taken together, the above taxes totaled 18¼%.
Some residents were paying over $1,000 per year in parking taxes. In one building alone, fifteen co-op apartment owners plus the resident superintendent were paying about $16,000 in taxes each year for parking in the co-op's garage! Midboro has just freed those shareholders and their co-op (which was paying for the superintendent's parking spot) from paying all those taxes.
The process to eliminate this tax burden can only be enacted through the management company of the association. Since most managing agents never heard about this law, they are not acting on behalf of the resident owners to make them eligible for this complete parking tax exclusion.
The managing agent is responsible to compile a list of every shareholder or condo owner that parks in the garage. The list must include: a) their name, b) their apartment number, c) the make of their vehicle and d) the license plate number of each vehicle. The garage operator must immediately stop charging all parking taxes when they receive this master list.
The managing agent must also notify the parking facility of any changes to the list. For garage operators or associations that operate the garage themselves as a commercial parking facility, this law requires that they adjust their quarterly or annual tax reports to exclude all eligible homeowners. Garage operators should pro rate any parking and sales tax from the 1st through the 5th of February 2001. If they balk, the manager should provide them with a copy of TSB-M-01(3)S, a sales tax advisory issued by the NYS Tax Departments' Technical Services Division.
The New York State Department of Taxation and Finance does not hold press conferences to announce this type of tax relief. Those that populate the cooperatives and condominiums of this city must rely on how well-informed their accountants, attorneys and/or managing agents are. There is no financial gain for the managing agent in obtaining this tax exclusion (just more paperwork) and an association only gains if they are paying for a rental spot for their staff. The only true benefit goes to the people who count the most - the resident owners in co-ops and condos.