1201 - Taxes administered by cities of one million or more.

§  1201.  Taxes  administered  by  cities  of  one  million  or  more.  Notwithstanding any other provisions of law to the contrary, but subject  to the applicable limitations and exemptions in part II of this article,  any city in this state having a  population  of  one  million  or  more,  acting  through  its  local  legislative  body, is hereby authorized and  empowered to adopt and amend local laws imposing in any such city any or  all of the types of taxes set forth in  the  following  subdivisions  of  this  section, such taxes to be administered and collected by the fiscal  officers of such city in the manner provided for in subpart  A  of  part  III of this article:    (a)  Taxes  on  the  privilege  of doing any business, engaging in any  trade, calling, occupation or profession; owning, holding  or  occupying  any  property;  possessing or exercising any franchise or franchises; or  on the gross receipts from sales to persons  within  such  city;  except  that no tax may be imposed pursuant to this subdivision on persons as to  whom  authority  to  tax is granted by article two-b of the general city  law.  The rate of the taxes authorized in this subdivision shall not  be  in  excess  of one and seventeen one hundredths times the rate fixed for  the corresponding taxes by local law fifty-one of the city of  New  York  for  the  year  nineteen hundred forty-one, and not in excess of two and  thirty-five one hundredths times the rate fixed  for  the  corresponding  tax  by  local  law  forty-nine  of  the  city  of New York for the year  nineteen hundred forty-one, except that as to  persons  engaged  in  the  business of operating or leasing sleeping and parlor railroad cars or of  operating railroads other than street surface, rapid transit, subway and  elevated  railroads,  the  rate  shall  not  be  in  excess of three and  fifty-two one hundredths percent of gross income and except that  as  to  persons  engaged  in the business of operating omnibuses with a carrying  capacity of more than seven persons, whether or  not  such  persons  are  subject  to  the  supervision of the state department of public service,  the rate shall not be in excess of  one  and  seventeen  one  hundredths  percent of gross income or gross operating income, as the case may be.    Notwithstanding  the  limitations  as  to rate provided above, for the  years nineteen hundred seventy-three and those following, such city  may  impose,  by local law, a surtax of forty per centum of the percentage of  tax in effect pursuant to this subdivision in such  city  for  the  year  nineteen hundred seventy-two.    (b)  (i)  Taxes  on  each deed, other instrument or transaction (other  than a deed or instrument given solely as security or a transaction  the  sole  purpose  of  which  is to secure an obligation or indebtedness) by  which any real property or any economic interest therein is conveyed  or  transferred,  measured  by the consideration or value of the interest or  property conveyed or transferred, (1) at a rate not to  exceed  one-half  of   one  percent  of  such  consideration  or  value  with  respect  to  conveyances made before July first,  nineteen  hundred  seventy-one,  or  made  in  performance  of a contract therefor executed before such date,  (2) at a rate not to exceed one percent of such consideration  or  value  with  respect  to  (A)  all  conveyances  made  on  or after July first,  nineteen hundred seventy-one and before February first, nineteen hundred  eighty-two, or made in  performance  of  a  contract  therefor  executed  during  such  period,  (B)  conveyances  or  transfers  made on or after  February first, nineteen hundred eighty-two of one, two or  three-family  houses,  individual  cooperative  apartments  and individual residential  condominium  units,  or  interests  therein,  and  (C)  conveyances   or  transfers  made  on or after February first, nineteen hundred eighty-two  (other than grants, assignments or surrenders of leasehold interests  in  real  property)  where  the  consideration  or  value  is less than five  hundred thousand dollars, (3) at a rate not to  exceed  two  percent  ofsuch  consideration  or  value  with respect to all other conveyances or  transfers made on or after February first, nineteen  hundred  eighty-two  (other  than grants, assignments or surrenders of leasehold interests in  real  property)  other  than those conveyances or transfers specified in  subparagraphs four, five and six of this paragraph, (4) at a rate not to  exceed one and four hundred twenty-five thousandths of  one  percent  of  such  consideration  or  value where such consideration or value is less  than five hundred thousand dollars with respect to  all  conveyances  or  transfers  other  than for conveyances or transfers of one, two or three  family  houses,  individual  cooperative  apartments,   and   individual  residential  condominium units, or interests therein (other than grants,  assignment or surrenders of leasehold interests in real property),  made  on  or  after  August first, nineteen hundred eighty-nine, (5) at a rate  not to exceed one  and  four  hundred  twenty-five  thousandths  of  one  percent of such consideration or value where such consideration or value  is  more  than five hundred thousand dollars with respect to conveyances  or transfers of one, two or three family houses, individual  cooperative  apartments,  and  individual residential condominium units, or interests  therein (other than  grants,  assignments  or  surrenders  of  leasehold  interests  in  real  property),  made on or after August first, nineteen  hundred eighty-nine, and (6) at a rate not to exceed two and six hundred  twenty-five one thousandths of one  percent  of  such  consideration  or  value  where  such  consideration  or value is greater than five hundred  thousand dollars with respect to all conveyances or transfers other than  for conveyances or  transfers  of  one,  two  or  three  family  houses,  individual    cooperative   apartments,   and   individual   residential  condominium units, or interests therein (other than  grants,  assignment  or surrenders of leasehold interests in real property), made on or after  August  first, nineteen hundred eighty-nine. Provided, however, that any  such city may allow deductions, in determining the portion  of  any  tax  authorized hereby the proceeds of which are payable to the New York city  transit  authority  as hereinafter provided, for any continuing liens on  such interest or property where such interest or property is a one,  two  or  three-family  house,  an  individual  cooperative  apartment  or  an  individual residential condominium unit or where the  consideration  for  or  value  of  the  interest or property conveyed or transferred is less  than five hundred thousand dollars, and may also allow an exemption  not  in  excess of twenty-five thousand dollars on the consideration or value  of the interest or property conveyed and provided,  further,  that  such  taxes  shall  not apply if the contract for any such conveyance was made  prior to  May  first,  nineteen  hundred  fifty-nine.  Anything  to  the  contrary  notwithstanding, where the tax authorized hereby is imposed on  the consideration or value without any deduction for  continuing  liens,  the portion of the consideration or value ascribable to such liens shall  not  be  taxed  at  a rate in excess of one percent prior to July first,  nineteen hundred eighty-two, in excess of two percent on and after  July  first,  nineteen  hundred  eighty-two  and before August first, nineteen  hundred eighty-nine, or in excess of two  and  six  hundred  twenty-five  thousandths  of  one percent on and after August first, nineteen hundred  eighty-nine, except that where the interest or property is a one, two or  three-family house, an individual cooperative apartment or an individual  residential condominium unit or where the consideration for a  value  of  the  interest  or  property  conveyed  or  transferred is less than five  hundred thousand dollars the rate on  and  after  July  first,  nineteen  hundred  eighty-two shall not be in excess of one percent. The amount of  any pre-existing liens on  such  property  or  interest  which  continue  thereon  after  the conveyance or transfer shall be deemed to be part of  the consideration or value for purposes of  measuring  the  tax  withoutregard  to whether or not payment of the liens or of the underlying debt  is assumed by the grantee or transferee. The tax authorized  hereby  may  also be imposed (A) prior to July first, nineteen hundred eighty-two, at  a  rate  not  to  exceed  one  percent,  on  the granting, assignment or  surrender of a  leasehold  interest  in  real  property,  other  than  a  leasehold  interest in a one, two or three-family house or an individual  dwelling unit in a dwelling which is to be occupied or  is  occupied  as  the  residence  or home of four or more families living independently of  each other,  where  the  consideration  for  or  value  of  such  grant,  assignment or surrender is five hundred thousand dollars or more, (B) on  and  after  July  first,  nineteen  hundred eighty-two and before August  first, nineteen hundred  eighty-nine,  at  a  rate  not  to  exceed  two  percent,  on  the  granting,  assignment  or  surrender  of  a leasehold  interest in real property, except  that  in  the  case  of  a  leasehold  interest  in  a one, two or three-family house or an individual dwelling  unit in a dwelling which is  to  be  occupied  or  is  occupied  as  the  residence  or home of four or more families living independently of each  other, or where the consideration for or value of such grant, assignment  or surrender is less than five hundred thousand dollars, the rate  shall  not  exceed  one  percent  and  (C)  on and after August first, nineteen  hundred eighty-nine, at a  rate  not  to  exceed  two  and  six  hundred  twenty-five  thousandths  of one percent, on the granting, assignment or  surrender of a leasehold interest in real property, except that  in  the  case  of  a leasehold interest in a one, two or three-family house or an  individual dwelling unit in a dwelling which is to  be  occupied  or  is  occupied  as  the  residence  or  home  of  four or more families living  independently of each other where the consideration for or value of such  grant, assignment or  surrender  is  less  than  five  hundred  thousand  dollars,  the  rate  shall  not  exceed one percent, or in the case of a  leasehold interest in a one, two or three family house or an  individual  dwelling  unit  in  a dwelling which is to be occupied or is occupied as  the residence or home of four or more families living  independently  of  each  other  where  the  consideration  for  or  value  of  such  grant,  assignment or surrender is greater than five hundred  thousand  dollars,  the  rate  shall not exceed one and four hundred twenty-five thousandths  of one percent, or where the consideration for or  value  of  any  other  grant,  assignment  or  surrender  is  less  than  five hundred thousand  dollars, the rate shall not exceed  one  and  four  hundred  twenty-five  thousandths  of  one  percent; provided, however, that for purposes of a  tax on the granting of a leasehold interest in real property, the amount  subject to tax shall be only such amount as is not considered  rent  for  purposes  of  the  tax  authorized  to  be  imposed  on the occupancy of  commercial premises by chapter two hundred fifty-seven of  the  laws  of  nineteen hundred sixty-three, as amended, and imposed by a city having a  population  of  one million or more pursuant thereto. In the case of any  conveyance or transfer of real property or any economic interest therein  in complete  or  partial  liquidation  of  a  corporation,  partnership,  association,  trust  or  other  entity, the tax shall be measured by the  consideration for such conveyance or transfer or the value of  the  real  property  or  interest  therein, whichever is greater. Such taxes may be  imposed on any conveyance or  transfer  of  real  property  or  interest  therein  where  the  real property is located in such city regardless of  where transactions, negotiations, transfers of deeds  or  other  actions  with  regard  to  the transfer or conveyance take place, subject only to  the restrictions contained in section twelve hundred thirty. The payment  of, and the filing of a return  relating  to,  any  such  taxes  may  be  required  as  a  condition precedent (1) to the recording or filing of a  deed, lease, assignment or surrender of lease or other  instrument,  (2)to  the  commencement  of  any action or proceeding in any court of this  state in which any conveyance, transfer or lease described herein is  in  issue, directly or indirectly, or (3) to the receipt in evidence of such  deed, lease, assignment or surrender of lease or other instrument in any  such court. In each instance where the tax rate imposed pursuant to this  subdivision  is  two  percent, fifty percent of the total amount of such  tax, including fifty percent of any interest or penalties thereon, shall  be set aside in a special account by the commissioner of finance of such  city, provided, however, that where the consideration for  or  value  of  property  or interest conveyed or transferred includes the amount of any  nondeductible mortgage, lien or other encumbrance which  existed  before  the  conveyance or transfer and remains thereon after such conveyance or  transfer, (A) prior to  July  first,  nineteen  hundred  eighty-two  the  entire  amount  of tax imposed at a rate not in excess of one percent on  the  portion  of  the  consideration  or  value   ascribable   to   such  nondeductible   mortgage,  lien  or  other  encumbrance,  including  any  interest or penalties thereon, and fifty  percent  of  the  tax  on  the  balance  of  the  consideration or value, including fifty percent of any  interest or penalties thereon,  shall  be  set  aside  in  such  special  account,  and  (B)  on and after July first, nineteen hundred eighty-two  and before August first, nineteen hundred eighty-nine, fifty percent  of  the  amount of tax imposed at a rate in excess of one percent but not in  excess of two percent on the  portion  of  the  consideration  or  value  ascribable  to  such  nondeductible mortgage, lien or other encumbrance,  including fifty percent of any interest or penalties thereon, and  fifty  percent  of  the  tax  on  the  balance  of  the consideration or value,  including fifty percent of any interest or penalties thereon,  shall  be  set  aside  in such special account. On and after August first, nineteen  hundred eighty-nine,  in  each  instance  where  the  tax  rate  imposed  pursuant to this subdivision is in excess of two percent, the portion of  the  tax,  and  any interest or penalty thereon, to be set aside in such  special account shall be an amount equal to one  percent  of  the  total  consideration  for  or  value  of the real property or economic interest  therein  conveyed  or  transferred,  plus  any   interest   or   penalty  attributable  to  such portion of the tax. There shall also be set aside  in such special account prior to July first, nineteen hundred eighty-two  the total amount of taxes imposed on grants, assignments  or  surrenders  of  leasehold  interests  in  real  property,  including any interest or  penalties thereon; on and after July first, nineteen hundred  eighty-two  and  before  August  first, nineteen hundred eighty-nine, there shall be  set aside in such special account fifty percent of the amount  of  taxes  imposed  on  grants, assignments or surrenders of leasehold interests in  real property, other  than  a  leasehold  interest  in  a  one,  two  or  three-family house or an individual dwelling unit in a dwelling which is  to  be  occupied or is occupied as the residence or home of four or more  families living independently of each other, or where the  consideration  for  or  value  of such grant, assignment or surrender is less than five  hundred thousand dollars, including fifty percent  of  any  interest  or  penalties   thereon.   On  and  after  August  first,  nineteen  hundred  eighty-nine, there shall be set aside in such special account,  in  each  instance  where  the rate of tax on grants, assignments or surrenders of  leasehold interests in real property is two percent or more,  an  amount  equal  to one percent of the consideration for or value of the leasehold  interest granted, assigned or surrendered, plus any interest or  penalty  attributable  to  such  portion  of the tax. Notwithstanding anything in  this paragraph (i) to the contrary, in each instance where the tax  rate  imposed  pursuant  to paragraph (xi) of this subdivision is in excess of  one percent, the portion of tax, and any interest or penalty thereon, tobe set aside in such  special  account  shall  be  an  amount  equal  to  one-half  of  one percent of the total consideration for or value of the  real property or economic interest therein conveyed or transferred, plus  any  interest  or  penalty  attributable to such portion of the tax, and  there shall be set aside in such special account, in each instance where  the rate of tax imposed under paragraph  (xi)  of  this  subdivision  on  grants,  assignments  or  surrenders  of  leasehold  interests  in  real  property is in excess of one percent, an amount equal to one-half of one  percent of the consideration for or  value  of  the  leasehold  interest  granted,   assigned   or  surrendered,  plus  any  interest  or  penalty  attributable to such portion of the tax. Moneys in such account shall be  used for payment by such  commissioner  to  the  state  comptroller  for  deposit  in  the  urban mass transit operating assistance account of the  mass  transportation  operating  assistance  fund  of  any   amount   of  insufficiency  certified  by  the  state  comptroller  pursuant  to  the  provisions of subdivision six of section  eighty-eight-a  of  the  state  finance  law,  and, on the fifteenth day of each month such commissioner  shall transmit all funds  in  such  account  on  the  last  day  of  the  preceding  month,  except  the  amount  required  for the payment of any  amount of insufficiency certified by  the  state  comptroller  and  such  amount  as  he  deems  necessary  for  refunds  and  such  other amounts  necessary to finance the New York city transportation disabled committee  and the New York city  paratransit  system  as  established  by  section  fifteen-b  of  the  transportation  law,  provided,  however,  that such  amounts shall not exceed six percent of the total funds in  the  account  but  in  no event be less than one hundred seventy-five thousand dollars  beginning April first, nineteen hundred  eighty-six,  and  further  that  beginning  November  fifteenth,  nineteen hundred eighty-four and during  the entire period prior to operation of such system, the total  of  such  amounts shall not exceed three hundred seventy-five thousand dollars for  the administrative expenses of such committee and fifty thousand dollars  for  the  expenses  of  the agency designated pursuant to paragraph b of  subdivision five of such section, and other amounts necessary to finance  the operating needs of the private bus companies franchised by the  city  of  New  York  and  eligible to receive state operating assistance under  section eighteen-b of the transportation law,  provided,  however,  that  such  amounts  shall  not  exceed four percent of the total funds in the  account, to the New York city transit authority for mass transit  within  the city.    (ii)  For purposes of this subdivision, an "economic interest" in real  property  shall  mean  (1)  the  ownership  of  shares  of  stock  in  a  corporation  which  owns real property, (2) the ownership of an interest  or interests in a partnership, association or other  entity  which  owns  real  property,  and  (3)  the  ownership  of  a  beneficial interest or  interests in a trust which owns real property.    (iii) For purposes of this subdivision,  the  terms  "transferred"  or  "transfer,"  when  used  in  relation  to  an  economic interest in real  property, shall include the transfer or transfers of shares of stock  in  a  corporation,  interest  or interests in a partnership, association or  other entity, or beneficial interest or interests in  a  trust,  whether  made   by  one  or  several  persons,  or  in  one  or  several  related  transactions, which shares of stock or interest or interests  constitute  a  controlling  interest  in such corporation, partnership, association,  trust or other entity.    (iv) "Controlling interest" for purposes  of  this  subdivision  shall  mean:    (1)  in the case of a corporation, fifty percent or more of the  total combined voting power of all classes of stock of such corporation,  or fifty percent or more of the fair market  value  of  all  classes  ofstock  of  such  corporation;  and  (2)  in  the  case of a partnership,  association, trust or  other  entity,  fifty  percent  or  more  of  the  capital,   profits   or   beneficial   interest   in  such  partnership,  association, trust or other entity.    (v) Notwithstanding the definition of "controlling interest" contained  in  paragraph  (iv)  or  any  provision  to  the  contrary  contained in  paragraph (iii) of this subdivision, in the  case  of  any  transfer  of  shares  of stock in a cooperative housing corporation in connection with  the grant or transfer of a proprietary leasehold, the tax authorized  by  this subdivision shall apply to (1) the original transfer of such shares  of stock by the cooperative corporation or cooperative plan sponsor, and  (2)  any  subsequent  transfer  of  such  shares  of  stock by the owner  thereof. Notwithstanding any  provisions  of  this  subdivision  to  the  contrary,  in  the  case  of  a transfer described in clause two of this  paragraph  which  relates  to  an  individual  residential   unit,   the  consideration  for  such  transfer  shall not include any portion of the  unpaid principal of any mortgage on the real property of the cooperative  housing corporation. In determining the tax on a transfer  described  in  clause  (1)  of  this  paragraph,  a  credit  shall  be  allowed  for  a  proportionate part of the amount of any  tax  imposed  pursuant  to  the  authority  of  this  subdivision  and  paid  upon  the conveyance to the  cooperative housing corporation of the land and  building  or  buildings  comprising  the  cooperative  dwelling  or dwellings. Such proportionate  part shall be the amount determined by multiplying  the  amount  of  tax  paid  upon  the  conveyance  to the cooperative housing corporation by a  fraction, the numerator of which shall be the number of shares of  stock  transferred in a transaction described in clause (1) and the denominator  of which shall be the total number of outstanding shares of stock of the  cooperative  housing  corporation  (including  any  stock  held  by  the  corporation). In no event, however, shall such credit reduce the tax  on  a transfer described in clause (1) below zero, nor shall any such credit  be  allowed  for  any tax paid more than twenty-four months prior to the  date on which occurs the first in a series of  transfers  of  shares  of  stock in an offering of cooperative housing corporation shares described  in  clause  (1). For purposes of this subdivision, the term "cooperative  housing corporation" shall not include a housing company  organized  and  operating  pursuant  to  the  provisions  of article two, four, five, or  eleven of the private housing finance law.    (vi) In the case of a transfer of an economic interest in  any  entity  that  owns  assets in addition to real property or interest therein, the  consideration subject to tax shall be deemed equal to  the  fair  market  value  of the real property or interest therein apportioned based on the  percentage of the ownership interest in the entity transferred.    (vii) Any local law enacted pursuant to this subdivision  may  provide  for such credits as are required to avoid multiple taxation.    (viii)  Any  city  which  has  imposed  the  tax  authorized  by  this  subdivision prior to its amendment by a chapter of the laws of  nineteen  hundred eighty-one may continue to impose such tax without regard to the  amendments  made  by  such  chapter, or may amend the local law imposing  such tax to  incorporate  therein  the  provisions  authorized  by  this  subdivision  as  amended by such chapter of the laws of nineteen hundred  eighty-one. If such city amends such local law to  include  therein  the  additional provisions authorized by such chapter of the laws of nineteen  hundred  eighty-one,  the  provisions  so  added  shall not apply to any  transfer made pursuant to a written contract entered into prior  to  the  effective  date  of  such  chapter  of  the  laws  of  nineteen  hundred  eighty-one.(ix)  Notwithstanding  the  definition   of   "controlling   interest"  contained  in  paragraph  (iv)  or anything to the contrary contained in  paragraph (iii) of this subdivision, in the case of a corporation (other  than a cooperative housing corporation), partnership, association, trust  or  other entity formed for the purpose of cooperative ownership of real  property, the tax authorized by this subdivision  shall  apply  to  each  transfer  of:  shares  of  stock  in  such corporation, interest in such  partnership, association or other entity or beneficial interest in  such  trust,  in  connection  with  the  grant  or  transfer  of a proprietary  leasehold. Notwithstanding any provisions of  this  subdivision  to  the  contrary,  in  the  case of a transfer described in this paragraph which  relates to an individual  residential  unit  (other  than  the  original  transfer  of  such  a unit by the cooperative entity or cooperative plan  sponsor), the consideration for such  transfer  shall  not  include  any  portion  of the unpaid principal of any mortgage on the real property of  such corporation, partnership, association, trust or other entity.    (x) Notwithstanding any other provision of law to  the  contrary,  all  revenues  resulting  from  the  imposition  of  the  tax  authorized  by  paragraph (ix) of this subdivision shall be credited to and deposited in  the general fund of the city imposing such tax,  but  no  part  of  such  revenues  may  be  expended  unless appropriated in the annual budget of  such city.    (xi) Notwithstanding anything contained in this subdivision,  the  tax  imposed  under  paragraphs  (i), (v) and (ix) of this subdivision on any  deed or other instrument or transaction conveying or  transferring  real  property  or  an  economic  interest  therein,  that qualifies as a real  estate investment trust transfer, as defined below, shall be imposed  at  a  rate  equal  to  fifty  percent of the otherwise applicable rate. For  purposes of this paragraph (xi), a real estate investment trust transfer  shall mean (1) any deed or other instrument or transaction conveying  or  transferring  real  property  or  an economic interest therein to a real  estate investment trust as  defined  in  section  856  of  the  internal  revenue  code  (a  "REIT") or to a partnership or corporation in which a  REIT owns a controlling interest immediately following the  transaction;  and    (2)  any  issuance  or  transfer  of  an  interest  in a REIT, or in a  partnership or corporation in which a REIT owns a  controlling  interest  immediately  following  the  issuance  or transfer, in connection with a  transaction  described  in   subparagraph   one   of   this   paragraph.  Notwithstanding  the foregoing, a transaction described in the preceding  sentence shall not constitute a real estate  investment  trust  transfer  unless  (A)  it  occurs  in connection with the initial formation of the  REIT and the conditions described in subparagraphs  three  and  four  of  this  paragraph  are  satisfied,  or  (B) in the case of any real estate  investment  trust  transfer  occurring  on  or  after  July  thirteenth,  nineteen  hundred  ninety-six  and  before September first, two thousand  eleven, the transaction  is  described  in  subparagraph  five  of  this  paragraph in which case the provisions of such subparagraph shall apply.    (3)  The  value  of  the  ownership  interests  in  the  REIT, or in a  partnership  or  corporation  in  which  the  REIT  owns  a  controlling  interest,  received  by the grantor as consideration for such conveyance  or transfer must be equal to an amount not less than  forty  percent  of  the  value  of  the  equity  interest  in  the real property or economic  interest therein conveyed or transferred by the grantor to  the  grantee  and  such  ownership interests must be retained by the grantor or owners  of the grantor for a period of not less than  two  years  following  the  date of such conveyance or transfer; provided, however, that in the case  of  the  death of the grantor or an owner of the grantor within such twoyear period, this two year retention requirement shall be deemed  to  be  satisfied  notwithstanding  any conveyance or transfer of such ownership  interests held by such individual as a result of such death.  The  value  of  the  equity  interest  in  such  real  property or economic interest  therein shall be computed by subtracting from the consideration for  the  conveyance or transfer of the real property or economic interest therein  the   unpaid  balance  of  any  loans  secured  by  mortgages  or  other  encumbrances which are liens on the real property or  economic  interest  therein  immediately  before the conveyance or transfer. For purposes of  this computation, in the case  of  a  conveyance  or  transfer  of  real  property  other than a conveyance or transfer of an economic interest in  real property, the amount of the unpaid balance of any loans secured  by  mortgages  or  other encumbrances to be subtracted from consideration is  determined by multiplying the total unpaid balance of any loans  secured  by  mortgages  or  other  encumbrances  on  the  real  property  by  the  percentage of the ownership interest in the real property being conveyed  or transferred to the grantee. In the case of a transfer of an  economic  interest  in real property, such amount to be subtracted is equal to the  sum of the following amounts: (I)  a  reasonable  apportionment  to  the  interests  in  real  property  owned  by the entity of the amount of any  loans secured by encumbrances on the ownership interests in  the  entity  which are being conveyed or transferred and (II) the amount of any loans  secured  by  mortgages or other encumbrances on the real property of the  entity multiplied by the percentage interest  in  the  entity  which  is  being  conveyed  or transferred. Provided, however that, for purposes of  the computation made pursuant to this subparagraph three, any  mortgages  or  other encumbrances on the real property or economic interest therein  which are created in contemplation of the initial formation of the  REIT  or  in contemplation of the conveyance or transfer of such real property  or economic interest  therein  to  the  REIT  or  to  a  partnership  or  corporation  in  which  the REIT owns a controlling interest immediately  following the conveyance or transfer shall not be considered.    (4) Seventy-five percent or more of the cash proceeds received by such  REIT from the sale of ownership interests in such REIT upon its  initial  formation  must  be  used:  (I) to make payments on loans secured by any  interest in real property (including an ownership interest in an  entity  owning  real  property)  which  is  owned directly or indirectly by such  REIT; (II) to pay for capital  improvements  to  real  property  or  any  interest therein owned directly or indirectly by such REIT; (III) to pay  brokerage  fees and commissions, professional fees and payments to or on  behalf of a tenant as an inducement to enter into a  lease  or  sublease  incurred  in  connection  with  the  creation of a leasehold or sublease  pertaining to real property or any interest therein  owned  directly  or  indirectly  by  such REIT; (IV) to acquire any interest in real property  (including an ownership interest in any entity  owning  real  property),  apart  from any acquisition to which a reduced rate of tax is applicable  pursuant to this paragraph (without regard to this subparagraph); or (V)  for reserves established for any of the purposes described in clause  I,  II  or  III of this subparagraph. For purposes of this subparagraph, the  term real property shall include real property wherever located.    (5) If a transaction otherwise described in subparagraph two  of  this  paragraph  occurs other than in connection with the initial formation of  a REIT, the condition set forth in subparagraph four of  this  paragraph  shall  be  disregarded  and  such  transaction  shall constitute a "real  estate  investment  trust  transfer"  if  the  condition  set  forth  in  subparagraph  three  of  this  paragraph  would  be  satisfied if "fifty  percent" is substituted for "forty percent" therein.For purposes of  determining  the  consideration  for  a  real  estate  investment  trust  transfer taxable under this paragraph (xi), the value  of the real property or interest therein shall be equal to the estimated  market value as determined by the commissioner of finance of the city of  New  York for real property tax purposes as reflected on the most recent  notice of assessment issued by such commissioner, or such other value as  the taxpayer may establish to the  satisfaction  of  such  commissioner.  This  paragraph  (xi)  shall  only apply to real estate investment trust  transfers occurring on or after the effective date of this paragraph.    (xii) Notwithstanding any other  provision  of  this  subdivision,  in  determining  the  tax  authorized  by this subdivision with respect to a  deed, instrument or transaction conveying or transferring a one, two  or  three-family  house,  an  individual  residential  condominium  unit, an  individual residential cooperative apartment, or  an  interest  therein,  the  consideration for such conveyance or transfer shall exclude, to the  extent otherwise included therein, the amount of any mortgage  or  other  lien  or  encumbrance  on  the  real  property  or interest therein that  existed before the delivery of the deed  or  the  transfer  and  remains  thereon  after  the  date of delivery of the deed or the transfer, other  than any mortgage,  lien  or  encumbrance  placed  on  the  property  or  interest  in  connection  with, or in anticipation of, the conveyance or  transfer, or by reason  of  deferred  payments  of  the  purchase  price  whether  represented by notes or otherwise. Provided, however, that this  paragraph shall  not  apply  to  a  conveyance  or  transfer  (1)  to  a  mortgagee,  lienor or encumbrancer, regardless of whether the grantor or  transferor is or was personally liable for the indebtedness  secured  by  the  mortgage,  lien  or  encumbrance  or  whether the mortgage, lien or  encumbrance is canceled of record, or (2) which  qualifies  as  a  "real  estate  investment  trust transfer" as defined in paragraph (xi) of this  subdivision.    (c) Privilege taxes on amusement devices operated by coins, tokens  or  currency  (either  generally  or  upon selected types or classes of such  devices), including, but not limited to, juke box,  music,  skill  game,  digger, pool or billiard tables, booths providing live entertainment and  moving  picture  and  video devices, at a rate not to exceed twenty-five  dollars per annum for each such device.    (d) Taxes on the privilege of selling liquor, wine or beer  at  retail  for  on or off premises consumption, at a rate or in an amount per annum  not in excess of twenty-five percent  of  the  amount  of  license  fees  prescribed  therefor from time to time in the alcoholic beverage control  law.    (e) Taxes on the use of passenger motor vehicles of  a  type  commonly  used  for  non-commercial  purposes  owned by residents of the city at a  rate per annum for each such vehicle of not in excess of five dollars if  such vehicle weighs thirty-five hundred pounds or less and not in excess  of ten dollars per annum if such vehicle weighs  more  than  thirty-five  hundred  pounds;  and  taxes  on the use of trucks, buses and other such  commercial motor vehicles used principally in connection with a business  carried on within the city, except when owned  and  used  in  connection  with  the  operation of a farm by the owner or tenant thereof, at a rate  per annum for each such vehicle of not in excess of ten dollars.    (f) (1) Taxes on the sale of containers made in whole or  in  part  of  rigid  or  semi-rigid  paperboard,  fibre,  glass, metal, plastic or any  combination of such materials, including, but not limited  to,  barrels,  baskets,  bottles,  boxes,  cans, cartons, carrying cases, crates, cups,  cylinders,  drums,  glasses,  jars,  jugs,  pails,  pots,   rigid   foil  containers,  trays, tubs, tubes, tumblers, and vessels, intended for use  in packing or packaging any product intended for sale. Such taxes  shallbe  levied  upon  the  seller  or supplier of the container who or which  makes sales thereof to the person who purchases them (whether filled  or  unfilled)  for  the purpose of using them in connection with and as part  of  sales  at  retail  or  who  receives  them as containers of products  intended for sale at retail. Where no tax has been paid by  such  seller  or  supplier,  the buyer or person who purchases the container to use it  or its contents in making a sale at  retail  shall  be  liable  for  tax  thereon  upon  purchasing such container. Notwithstanding the provisions  of section twelve hundred twenty of this article, sellers and  suppliers  having  no  business  situs  in the city imposing the tax, who sell such  containers to retailers within the city may pay the tax so as to prevent  its levy upon such retailers. Such taxes shall be imposed at  rates  not  to  exceed  (i)  three cents for each plastic bottle, (ii) two cents for  each other plastic container, (iii) two cents for each glass  container,  (iv)  two  cents  for  each  metal  container  except one cent for metal  containers shown to be made of one metal only. Where a container is made  of a combination of two  or  more  of  the  materials  with  which  this  subdivision  deals,  it shall be classified and be taxable as if it were  made of that of its component materials for which  the  following  table  provides the highest rate:        fibre and paperboard      metal      glass        plastic                 1