Appeals Court Refuses to Lower Tax Assessment for Environmental Cleanup Costs

A New Jersey Appellate Court recently affirmed the Borough of Hawthorne’s real property tax assessment on a contaminated parcel of land which had been historically used for the manufacture of industrial and commercial coatings, including nail polish.  Pan Chemical Corp. v. Hawthorne Borough, Docket No. A-4779-06T1.  The Court found that the Borough’s tax assessment, which ignored the cost of environmental cleanup, reasonably relied on legislative definitions set forth in New Jersey’s Industrial Site Recovery Act (“ISRA”)  to determine whether the industrial property owned by Pan Chemical Company was “in use” or “shut down” for taxation valuation purposes.  ISRA contains statutory language which provides a rational, objective standard in by which one can determine whether property is  “in use” or “closed” for purposes of triggering the obligation to remediate which obligation would, in turn, have a negative effect upon the value of that real property for tax assessment purposes.

Read the Court’s opinion at:

http://www.judiciary.state.nj.us/opinions/a4779-06.pdf