New Jersey Legislature Increases Minimum Threshold for Filing a Property Tax Appeal Directly With the New Jersey Tax Court

     As noted on the official website for the New Jersey Tax Court, due to recently enacted legislation, any local property tax appeals that are not added or omitted assessments may be filed directly with the Tax Court only if the original assessment exceeds $1,000,000. 

     The Assembly Committee that reviewed the legislation and recommended its adoption noted that "[i]ncreasing the assessed value requirement will decrease the overburdened Tax Court's caseload and allow these cases to be heard by county boards of taxation, which are better equipped to handle a large volume of tax appeals."  For what it is worth, the prior $750,000 threshold had not been increased since it was first established in 1979. 

     The legislation increases the threshold for making a direct filing from $750,000 to $1,000,000.  Therefore, any taxpayer whose assessment is below the minimum threshold may still challenge its tax assessment by filing a Petition of Appeal with the County Board of Taxation in the county where the property is located.  However, those taxpayers whose assessments exceed $1,000,000 may either file a Petition at the County Board level or file a direct appeal with the Tax Court.  There are advantages and disadvantages with both approaches.


     Notices of the tax assessments are typically mailed on or around February 1st.  

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.