Chapter 91 - Stealth Killer of Meritorious Commercial Tax Appeals

In a time when opportunities abound for real property tax appeals of excessive assessments, owners and tenants should pay close attention to Chapter 91 requests issued by municipal assessors. Named after a State law, Chapter 91 has claimed many a worthy appeal filed with the Tax Court and the County Boards of Taxation over the years. It is recommended that any taxpayer contemplating tax relief and seeking a reduction in property taxes for non-residential property carefully scrutinize Chapter 91 requests.

 Chapter 91, also called N.J.S.A. 54:4-34, allows a municipal assessor to mail a request to the addressee of record to complete a summary of the income and expenses for an income-producing property – the so-called I&E statement. The I&E statement is in a prescribed format; it, along with a summary or copy of Chapter 91 must accompany the assessor’s request. Failure on the part of the assessor to follow this procedure may give a taxpayer an “out.” 

An interesting part of Chapter 91 is that it applies to all properties, residential and non-residential. While it is geared to capturing information from income-producing properties, owners of owner-occupied properties must comply. Thus, it is not a defense in an otherwise meritorious action for assessment reduction and tax relief to assert that the property is not income producing – the key is whether it is capable of being an income-producing property. 

The I&E statements must be filled out completely. Incomplete requests are viewed as evasive and intended to defeat the law’s purpose of information gathering for use by the assessor to set the proper assessment for a property.

Since Chapter 91’s purpose is to collect information useful to reaching a fair and accurate assessment, an assessor uses it as a tool in their defense case in a tax appeal and/or to prevent tax appeals altogether. Failure to file an I&E statement will be permanently fatal as it will result in a dismissal of a tax appeal petition or complaint.

Opportunities to reduce real property taxes should not be overlooked in these difficult economic times as commercial property values are declining. While the deadline for filing most tax appeals is April 1st, there are other deadlines throughout the calendar year for other types of appeals. For example, May 1st is the deadline for appeals of properties in most municipalities which had a municipal-wide revaluation. Accordingly, be on the alert for the assessor’s Chapter 91 request. Even if a taxpayer failed to properly file an I&E statement in previous years, there is always an opportunity for the repair of a property’s Chapter 91 status paving the way for prospective tax relief by appeal or negotiation in a future year.

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