In January 2021, some New York State legislators refiled legislation to record mezzanine debt and some types of preferred equity investments as mortgages and require taxes on them.

Some commercial real estate groups strongly objected, and it looks like their efforts did the trick as the mezzanine debt and preferred equity tax was removed from the New York State budget, according to William Kooper, vice president of state government affairs and industry relations, and Grant Carlson, policy advisor for commercial/multifamily, at the Mortgage Bankers Association, writing for Trepp. 

Law firm Pillsbury Winthrop Shaw Pittman posted an analysis of the latest bill along with a number of observations, like "it is not a stretch to imagine that this provision (and the balance of the amendments, read as a whole) could be interpreted to require (and that recording and filing offices might interpret this language as requiring) the filing of a financing statement in connection with any new mezzanine debt—even if created later than (and therefore not concurrently with) a mortgage loan."