Hempstead tax refund dispute with Nassau County is adjourned

A $30 million court fight between Nassau County and Hempstead Town over tax refunds has been adjourned until next week after state Supreme Court Justice Leonard Steinman Tuesday ordered the town to put the disputed money in an interest-bearing account until the case is decided.

At Steinman’s order, Hempstead Town Tax Receiver Don Clavin also turned over to the county the remaining $18.9 million in general property taxes owed to Nassau, officials said.

Hempstead last week obtained a court order directing Clavin to withhold $29.7 million from a total $48.6 million in property taxes collected on Nassau’s behalf. The town contends Nassau owes Hempstead the money mostly for reimbursement of property taxes the town refunded utility companies because of erroneous county assessments.

The total withheld also includes a small amount that Hempstead says the county overcharged the town for residents’ tuition at the Fashion Institute of Technology.

Nassau contends Clavin has no legal right to hold its money and suggested that the receiver could be found personally liable. “The County is confident that the Town’s Receiver of Taxes must turn over the County’s property taxes immediately,” County Attorney Carnell Foskey said in a statement.

But Hempstead Town spokesman Michael Deery said Clavin “fully intended to remit monies outside of the $30 million in question.”

He added, “We believe the receiver is on solid legal grounds” in withholding the taxes.