Kane, J.
Chapter 400 of the Laws of 1971, effective June 9, 1971, added section 253-a to the Tax Law (all statutory references hereinafter are to the Tax Law). It authorized cities with a population of one million or more to impose a mortgage recording tax on property situated in such a city in addition to the tax imposed by section 253. After fixing a basic rate, it was also provided with respect to mortgages covering lands all within the State, but not all within such a city, that "the amount of such tax * * * shall be determined in a manner similar to that prescribed in the first paragraph of section two hundred sixty which concerns real property situated in two or more counties” (§ 253-a, subd 3). On December 23, 1971, petitioner recorded a mortgage on real property located in the City of New York and in the Counties of Nassau and Suffolk. It paid the tax due under section 253, but commenced this proceeding to obtain the refund of certain additional monies [81] when the respondent denied its application for a redetermination of the amount said to be owing under section 253-a.
As relevant, section 260 contains the following language: "When the real property covered by a mortgage is situated in more than one tax district, the state tax commission shall apportion the tax paid on such mortgage between the respective tax districts upon the basis of the relative assessments of such real property as the same appear on the last assessment-rolls. If, however, the whole or any part of the property covered by such a mortgage is not assessed upon the last assessment-roll or rolls of the tax district or districts in which it is situated, or is so assessed, as a part of a larger tract, that the assessed value cannot be determined, or if improvements have been made to such an extent as materially to change the value of the property so assessed, the tax commission may require the local assessors in the respective tax districts, or the mortgagor, or mortgagee, to furnish sworn appraisals of the property in each tax district, and upon such appraisals shall determine the apportionment. If such mortgage covers real property in two or more counties, the tax commission shall determine the proportion of the tax which shall be paid by the recording officer who has received the same to the recording officers of the other counties in which are situated the tax districts entitled to share therein”. Respondent utilized the actual assessment roll figures of the premises covered by the mortgage in calculating petitioner’s section 253-a tax. The assessment of the New York City property was added to the assessments of the parcels located elsewhere within the State and the ratio pertaining to the New York City realty was then applied to the sum derived from taxing the entire mortgage amount at the section 253-a rate. Petitioner maintains that this method of determining its liability was improper.
Only the third sentence of the quoted paragraph refers to property located in two or more counties. It merely declares that the respondent "shall determine the proportion” but does not directly specify how that is to be accomplished. Assuming that guidance was correctly obtained from the preceding sentences, respondent argues that the term "relative assessments” means a comparison based on actual assessment figures and, in any event, since that is the practical interpretation which has been placed on that language for a long period of time without legislative interference, we are bound to [82] accept it. However, the principle of upholding the construction given to a statute by the agency charged with its administration is subject to the important qualification that the selected construction is not irrational or unreasonable (see, e.g., Matter of Howard v Wyman, 28 NY2d 434). Here the very wording of that statute reveals that the Legislature never intended the apportionment process would always be inflexibly tied to raw assessment figures. It was recognized, for example, that improvements to the covered realty might have so materially changed the value of the property as to warrant resort to appraisals of the respective parcels in each tax district. This conclusion is further reinforced by the last sentence of section 260 which recites that "where the provisions for distribution of the tax among tax districts are inapplicable or inadequate, the tax commission shall establish a basis of apportionment that will be equitable and fair.” We do not mean to imply that an apportionment founded on relative assessments is not allowed, but it should be fairly obvious that the germane paragraph admits of more than one interpretation and it remains to be seen whether the construction chosen by respondent is irrational or unreasonable where similarity is all that is required under section 253-a.
The total amount of the basic mortgage recording tax under section 253 is fixed and the section 260 machinery for dividing it among the various taxing authorities is of no particular concern to the taxpayer. Thus, the typical apportionment which is based on a comparison of relative assessments strikes us as a simple and inexpensive method by which those tax proceeds may be shared. This does not hold true with the newer section 253-a tax, however, because the very amount of additional tax which must be paid to the City of New York is made to. depend on some ratio between covered property located therein and elsewhere within the State. As a result, the taxpayer is vitally interested in how that ratio is computed for the higher the ratio the higher will be the tax burden. The parties acknowledge that the City of New York and the involved taxing units in the Counties of Nassau and Suffolk assess properties within their respective boundaries at a percentage of full value. Significantly, these percentages are not equal. When actual assessments are combined, therefore, the ratio formed thereby is not comprised of uniform elements. While these inherently unequal assessments may sometimes be conveniently employed by governmental entities [83] to divide the section 253 tax, it can hardly be urged that a process which mixes apples and oranges to arrive at the amount of additional tax due under section 253-a is either rational or reasonable.
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Kane, J.
Chapter 400 of the Laws of 1971, effective June 9, 1971, added section 253-a to the Tax Law (all statutory references hereinafter are to the Tax Law). It authorized cities with a population of one million or more to impose a mortgage recording tax on property situated in such a city in addition to the tax imposed by section 253. After fixing a basic rate, it was also provided with respect to mortgages covering lands all within the State, but not all within such a city, that "the amount of such tax * * * shall be determined in a manner similar to that prescribed in the first paragraph of section two hundred sixty which concerns real property situated in two or more counties” (§ 253-a, subd 3). On December 23, 1971, petitioner recorded a mortgage on real property located in the City of New York and in the Counties of Nassau and Suffolk. It paid the tax due under section 253, but commenced this proceeding to obtain the refund of certain additional monies [81] when the respondent denied its application for a redetermination of the amount said to be owing under section 253-a.
As relevant, section 260 contains the following language: "When the real property covered by a mortgage is situated in more than one tax district, the state tax commission shall apportion the tax paid on such mortgage between the respective tax districts upon the basis of the relative assessments of such real property as the same appear on the last assessment-rolls. If, however, the whole or any part of the property covered by such a mortgage is not assessed upon the last assessment-roll or rolls of the tax district or districts in which it is situated, or is so assessed, as a part of a larger tract, that the assessed value cannot be determined, or if improvements have been made to such an extent as materially to change the value of the property so assessed, the tax commission may require the local assessors in the respective tax districts, or the mortgagor, or mortgagee, to furnish sworn appraisals of the property in each tax district, and upon such appraisals shall determine the apportionment. If such mortgage covers real property in two or more counties, the tax commission shall determine the proportion of the tax which shall be paid by the recording officer who has received the same to the recording officers of the other counties in which are situated the tax districts entitled to share therein”. Respondent utilized the actual assessment roll figures of the premises covered by the mortgage in calculating petitioner’s section 253-a tax. The assessment of the New York City property was added to the assessments of the parcels located elsewhere within the State and the ratio pertaining to the New York City realty was then applied to the sum derived from taxing the entire mortgage amount at the section 253-a rate. Petitioner maintains that this method of determining its liability was improper.
Only the third sentence of the quoted paragraph refers to property located in two or more counties. It merely declares that the respondent "shall determine the proportion” but does not directly specify how that is to be accomplished. Assuming that guidance was correctly obtained from the preceding sentences, respondent argues that the term "relative assessments” means a comparison based on actual assessment figures and, in any event, since that is the practical interpretation which has been placed on that language for a long period of time without legislative interference, we are bound to [82] accept it. However, the principle of upholding the construction given to a statute by the agency charged with its administration is subject to the important qualification that the selected construction is not irrational or unreasonable (see, e.g., Matter of Howard v Wyman, 28 NY2d 434). Here the very wording of that statute reveals that the Legislature never intended the apportionment process would always be inflexibly tied to raw assessment figures. It was recognized, for example, that improvements to the covered realty might have so materially changed the value of the property as to warrant resort to appraisals of the respective parcels in each tax district. This conclusion is further reinforced by the last sentence of section 260 which recites that "where the provisions for distribution of the tax among tax districts are inapplicable or inadequate, the tax commission shall establish a basis of apportionment that will be equitable and fair.” We do not mean to imply that an apportionment founded on relative assessments is not allowed, but it should be fairly obvious that the germane paragraph admits of more than one interpretation and it remains to be seen whether the construction chosen by respondent is irrational or unreasonable where similarity is all that is required under section 253-a.
The total amount of the basic mortgage recording tax under section 253 is fixed and the section 260 machinery for dividing it among the various taxing authorities is of no particular concern to the taxpayer. Thus, the typical apportionment which is based on a comparison of relative assessments strikes us as a simple and inexpensive method by which those tax proceeds may be shared. This does not hold true with the newer section 253-a tax, however, because the very amount of additional tax which must be paid to the City of New York is made to. depend on some ratio between covered property located therein and elsewhere within the State. As a result, the taxpayer is vitally interested in how that ratio is computed for the higher the ratio the higher will be the tax burden. The parties acknowledge that the City of New York and the involved taxing units in the Counties of Nassau and Suffolk assess properties within their respective boundaries at a percentage of full value. Significantly, these percentages are not equal. When actual assessments are combined, therefore, the ratio formed thereby is not comprised of uniform elements. While these inherently unequal assessments may sometimes be conveniently employed by governmental entities [83] to divide the section 253 tax, it can hardly be urged that a process which mixes apples and oranges to arrive at the amount of additional tax due under section 253-a is either rational or reasonable.
In 1975 the Court of Appeals denounced these fractional assessment customs and aptly noted that the State Equalization Board was likely created to correct some of the problems that disparate valuations generated (Matter of Hellerstein v Assessors of Town of Islip, 37 NY2d 1, 12). Petitioner argues, with some logic, that if the existing State-wide equalization rates were applied to the separate assessments of its mortgaged property an equitable ratio could be developed. Nevertheless, an equalization rate does not measure the ratio of assessed valuation to the full value of any individual property, nor does it insure that assessments are made at a uniform percentage of full value within a taxing jurisdiction (Matter of Hellerstein, supra, p 9). Although the equalization approach would certainly produce a fairer comparison between properties located in more than one taxing unit, we hesitate to conclude that this is the only acceptable device by which respondent may calculate petitioner’s section 253-a tax liability. It is enough to agree that the challenged construction of section 260 is irrational and unreasonable in this situation without mandating that respondent adopt the alternative favored by petitioner. Accordingly, the petition should be granted to the extent of remitting the matter to respondent for further proceedings not inconsistent herewith. We have not found it necessary to reach or consider petitioner’s remaining contentions.
The determination should be annulled and the matter remitted to the State Tax Commission for further proceedings not inconsistent herewith, without costs.