As a Class 4 commercial taxpayer, you may have recently received notice from the Nassau County Department of Assessment regarding the Disputed Assessment Fund (DAF). See the DAF Frequently Asked Questions, here.

The new law will apply to Class 4 Commercial property owners in Nassau County who have challenged their property’s tax assessment for 2016/17. The law essentially requires that a certain percentage of those Class 4 taxpayers’ payments be held in separate accounts pending the resolution of their tax appeal. If the appeal is successful, the refund will be made from the County’s DAF account. If the refund is less than the escrowed amount, the excess will be forwarded to the applicable taxing jurisdictions, pro rata.

However, the DAF may have an impact on your total tax outlay even if you did not challenge your assessment. Because a portion of commercial tax payments made will now be sent to the DAF instead of the school districts, towns, etc., it is possible that it will result in an increase in tax rates. These rate increases will apply to all Class 4 commercial taxpayers, whether they appealed their assessment or not.

It is not possible to measure the effects of the DAF law until after the first half School tax bills have been issued in October, 2016. Please note that the School tax DAF portion/charge will not be reflected on the 2016/17 School tax bill, but will first appear on the 2017 General bill, along with the General tax DAF charge.

This is how the law is written. We will closely monitor the County’s application of the law, as well as its effect on the tax rates, in formulating a response on behalf of our clients.

We will, of course, keep you advised on this subject.