By Keri D. Callocchia
The occupancy tax was an ill-considered, one-time tax passed by the Buffalo Common Council in 1976. It charged every occupied dwelling within the City of Buffalo around $10.
The following year, the Common Council decided to scrap the occupancy tax, but for residents of the City of Buffalo it continues on as a potential lien against their property.
Every time a City of Buffalo property is resold the title question of the occupancy tax payment rears its head.
Sellers or their attorneys must go to the Treasury Department and pay $3 for a tax receipt proving that the $10 tax was paid before the closing can occur.
Most residents have no idea what the tax is for and why they have to pay $3 to prove it was paid more than 30 years ago.
The city cannot legally forgive a tax, but it can expire the lien, which would in effect make it finally go away.
Similarly, a statute of limitations could be imposed on the collection of taxes that would end liabilities beyond, say, 30 years. (Erie County presently has a 25-year statute of limitations).
The occupancy tax lien simply needs to find a way to go away. Its continuation is a symbol of inefficient government. While it certainly wastes the time of residents and real estate professionals, it also wastes the valuable time of city employees.
The $3 charged for the receipt is revenue neutral when considering the costs of employing someone to assist with these requests, but quickly becomes a drain on the city’s budget when opportunity costs are considered; i.e., those employees charged with processing occupancy tax receipts could instead be processing larger tax payments or fines that could be deposited and generating interest.
For anyone who has been paying attention, the City of Buffalo has made great strides in improving access to property tax information online.
Residents and real estate professionals now have access to information that previously would have required phone calls to the tax office or trips downtown. Similarly, thanks to the leadership at the City Clerk’s Office, we will soon be able to file documents remotely. The future is here. Why are we dragging the occupancy tax into it?
The expiration of the occupancy tax is a matter of common sense and is past due. I am asking the Common Council to expire the lien of the 1976 occupancy tax. Thirty-seven years is enough.
Keri D. Callocchia is a real estate attorney with a private practice in Buffalo.