New York Consolidated Laws, Tax Law - TAX § 256. Mortgages for indefinite amounts or for contract obligations

If the principal indebtedness secured or which by any contingency may be secured by a mortgage is not determinable from the terms of the mortgage, or if a mortgage is given to secure the performance by the mortgagor or any other person of a contract obligation other than the payment of a specific sum of money and the maximum amount secured or which by any contingency may be secured by the mortgage is not expressed therein, such mortgage shall be taxable under section two hundred and fifty-three of this chapter upon the value of the property covered by the mortgage, which shall be determined by the recording officer to whom such mortgage is presented for record, unless at the time of presenting such mortgage for record the owner thereof shall file with the recording officer a sworn statement of the maximum amount secured or which under any contingency may be secured by the mortgage.  If such maximum amount is expressed in the mortgage or in a sworn statement filed as required by this section, such amount shall be the basis for assessing the tax imposed by this article.  A statement filed by the owner of a mortgage pursuant to this section shall thereafter at all times be binding upon and conclusive against such owner, the holders of any bonds or obligations secured by such mortgage and all persons claiming through the mortgagee any interest in the mortgage or the mortgaged premises.  If the maximum amount secured or which by any contingency may be secured by the mortgage is not expressed in the mortgage or in a sworn statement as authorized by this section, the recording officer at the time such mortgage is offered for record may require the mortgagor or mortgagee to furnish him with proofs as to such facts as he deems necessary for the purpose of computing the value of the property covered by the mortgage and such proofs shall include an affidavit of appraisal of the value of the property made by at least two competent, disinterested persons and shall be preserved in his office.  His determination and copies of the proofs as to the basis for computing the tax on such mortgage shall be forwarded to and subject to review by the state tax commission.  Such mortgage shall not be recorded until the statement is filed or the proofs are furnished as required by this article.

Whenever any such mortgage shall have been recorded without the payment of the tax as herein provided, and it shall thereafter be determined by the tax commission, after an opportunity to be heard by the parties in interest, that the failure to pay such tax was due to an honest misconception on the part of the recording officer or the owner of the instrument as to the nature of such instrument and its taxability under this article, the tax commission may make an order permitting the recording officer to file the aforesaid statement nunc pro tunc as of the date of the recording of the mortgage.  The payment of the tax may be made on the basis of such statement with interest thereon at the rate of six per centum per annum as provided in section two hundred and fifty-eight of this article.


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