In the Matter of the Application of: RCN TELECOM SERVICES OF NEW YORK, et al, Petitioners,
THE CITY OF NEW YORK, et al., Respondents Index No. 105286/11
DECISION AND ORDER
Hon. Martin Shulman, J.S.C.
Petitioners bring two (2) applications under motion sequence numbers 1 and 2 which are consolidated for disposition. Petitioners' application under sequence number 1 was brought as a CPLR Article 78 proceeding and seeks a declaration that certain real property tax assessments for tax years 2010-2011 and 2011-2012 on properties identified as Block 72553, Lot 21 and Block 72746, Lot 21 are nullities. In sequence 2 petitioners move pursuant to CPLR 408 for leave to conduct discovery.
The petition describes the property at issue as equipment located at various premises petitioners lease in New York City and "used to provide emergency back-up power to support petitioners' telecommunications related operations." Petition at ¶10. Petitioners argue that the subject assessments are nullities because:
(1)The property at issue is not assessable as real property since: a) it is lessee-installed, owned and operated equipment used for trade purposes; b) it is telecommunications equipment (Ch. 416, L1987); and c) it is moveable machinery used for trade and manufacture and thus exempt from real property taxation under RPTL§102(12)(f);
(2) Respondents have acted discriminatorily, arbitrarily and capriciously in assessing the subject property in violation of the RPTL and the New York and United States Constitutions; and
(3) Respondents have failed to provide timely notice of the assessments as required by statute and under the due process clause of the United States and New York State Constitutions.
In support of their contention that the property at issue is not assessable as real property petitioners rely heavily on the text of RPTL §102(12)(f)'s second clause which enumerates the classes of property excluded from the statutory definition of real property. The following are specifically excluded:
. . . movable machinery, or equipment consisting of structures or erections to the operation of which machinery is essential, owned by a corporation taxable under article nine-a of the tax law, used for trade or manufacture and not essential for the support of the building, structure or super-structure, and removable without material injury thereto.
However, the statute's first clause enumerates those classes of property included in the definition of real estate and "power generating apparatus" is clearly one of them (RPTL §102 [f]). Petitioners contend their power generating equipment which is the subject of this proceeding is exempt because it is "moveable machinery" used in trade or manufacture, owned by an Article 9-a corporation and not essential for the building's support.
Accepted rules of statutory interpretation provide:
It is a universal principle in the interpretation of statutes that expressio unius est exclusio alterius. That is, to say, the specific mention of one person or thing implies the exclusion of other persons or thing (sic). As otherwise expressed, where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted and excluded. (McKinney's Statutes §240)
The enumeration of "power generating apparatus" in the statute's first clause together with other classes of property intended to be taxable, and the failure to include it in the second clause which enumerates classes of property which are exempt, demonstrates the legislature's clear intention to make power generating apparatus taxable as real property no matter which other classes of property it might coincidentally fall into.
When reviewed using the foregoing rule of interpretation, RPTL §102(12)(f) is clear. However, even if it was ambiguous, it would be unavailing to petitioners. "Tax exemptions . . . are limitations of sovereignty and are strictly construed (citations omitted). If ambiguity or uncertainty occurs, all doubts must be resolved against the exemption' (citations omitted)." Matter of City of Lackawanna ...