FILING REQUIREMENTS FOR 2010 TAX APPEALS

N.J.S.A. 54:3-21 is the jurisdictional statute for tax appeals. It was recently amended by L. 2009, c.251, effective January 16, 2010. This amendment is noteworthy as it raises the floor for filing direct real property assessment challenges in the Tax Court. Previously, a complaint could not be filed in the Tax Court and the County Board of Taxation by passed if the assessed value exceeded $750,000.   As of January 16, 2010, the assessed value for a property must exceed $1 million to trigger the court’s original jurisdiction.    R. 8:3-5 of New Jersey’s Rules of Court were changed as of February 9th to conform.

Taxpayers are not remediless if the property’s assessment is $1 million or less. In that case, a petition, not a complaint, can be filed with the County Board of Taxation of the county in which the property is located. The procedural requirements for County Boards differ from board to board as well as with the procedural requirements of the Tax Court. However, in either forum, a taxpayer must comply with several challenges including: (1) the burden of proof on value, (2) Chapter 91, and (3) Chapter 123. Failure to comply with any of these will result in dismissal of the taxpayer’s petition or complaint, as the case may be.

 

The specifics of N.J.S.A. 54:3-21 (the “Statute”) remain the same:

 

  • A petition or a complaint must be filed on or before April 1st of the year of assessment or, on or before May 1st, if the taxing district undertook a municipal-wide revaluation or a municipal-wide reassessment.
  • The taxing district (the assessor) is required to bulk mail to each property owner a notification of the assessment and file a certification with the County Board of Taxation advising of the date the bulk mailing was completed.
  • Appeals are governed by the State Uniform Tax Procedure Law. An appeal to the Tax Court establishes jurisdiction over the entire matter with the court.
  • A cross-petition of appeal or a counterclaim can be filed within 20 days from the date of service of a petition or a complaint by the other party.

 

 

 

 

It is well established that this Statute is jurisdictional and therefore filing deadlines cannot be waived. An untimely filing will result in a dismissal of an appeal no matter how meritorious. Finally, the appeal process established by this Statute does not apply to appeals of an assessment or an exemption based on a financial agreement controlled by the Long Term Tax Exemption Law.

 

If you have any further questions, please feel free to consult Jeffrey M. Hall at (609) 895-6755 or jhall@foxrothschild.com.

Tax Appeals - Score Another Victory for the Municipality in a Chapter 91 dismissal

 Further to my May 12, 2009 blog posting whereby the Appellate Division affirmed the dismissal of a taxpayer's tax assessment appeal on Chapter 91 grounds, the Appellate Division reinforced its interpretation that the Chapter 91 dismissal sanction does not violate the Excessive Fines Clause of the United States and New Jersey Constitutions.  

In Davanne Realty v. Edison Township (decided June 15, 2009), the Appellate Division concluded that "[t]he appeal-dismissal sanction imposed by N.J.S.A. 54:4-34 is not punishment because it is rationally and reasonably related to and fully justified by the need to efficiently assess and collect property taxes based on property value. The Legislature's denial of an opportunity to present relevant information beyond the statutory deadline may further the government's interest in timely receipt of data by "creat[ing] a reasonable incentive" for meeting the deadline for response.""

It is important to note that the taxpayer here did not avail itself of the right to challenge the tax assessor's methodology at a "reasonableness hearing".  In short, inquiry focuses on the reasonableness of the data used by the assessor and its methodology used to determine the assessment. Unless the tax assessor’s assessment is completely unfounded, the assessment will likely be upheld. 

However, because a reasonableness hearing is a consequence of the taxpayer’s failure to respond to a Chapter 91 request, the taxpayer is prohibited from introducing any affirmative evidence to refute the data used by and the conclusion reached by the assessor.  Nevertheless, it is an opportunity for the taxpayer to obtain some clarity as to how its income-producing property is being valued. 

Not to sound like a broken record  (does today's youth even know what a 45 is?) a corrupted .mp3 file, but if you are served with a Chapter 91 income and expense request, and you are desirous of reducing your taxes by filing a tax appeal the following year, you must file a Chapter 91 response within the required time period.  It is ever clear with each passing decision that the failure to comply with Chapter 91 will almost certainly result in the dismissal of your tax appeal.

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.