Another Unsuccessful Taxpayer Claim
A New Jersey appeals court rejected a commercial taxpayer’s claim that its local property tax bill was an unconstitutional fine, forfeiture or penalty because of a statutory sanction dismissing its appeal for failing to provide income and expense information to the local tax assessor. Davanne Realty v. Edison Township, Superior Court Docket No. A-0333-08T3, decided June 15, 2009, affirmed a Tax Court judge’s dismissal under N.J.S.A. 54:4-34, known as “Chapter 91”.
The property owner, Davanne, had appealed its local property tax assessment on a warehouse in Edison Townsip, but the appeal was dismissed by the New Jersey Tax Court because the owner did not respond to Edison’s request, under Chapter 91, for information regarding income on the property. Davanne was provided with an opportunity to challenge the reasonableness of the information or methodology employed by the assessor in the Tax Court, but declined. Instead, the owner submitted information which suggested that the property was over-assessed by more than $300,000, resulting in a tax bill which was more than $11,000 per year higher than it would have been with a reduced assessment, thus leading to the owner’s argument that the excess was an impermissible fine, forfeiture or penalty.
The Court held that the appeal-dismissal sanction authorized by Chapter 91 was not a “punishment” becasue it is rationally and reasonably related to the need of municipalities to efficiently assess and collect property taxes. Chapter 91 incentivizes owners to provide the information, and minimizes costs of post-assessment litigation created by an owner’s delay in providing relevant information, but the owners’ non-compliance with a Chapter 91 request does not result in any additional fine or tax. For these reasons, the appellate court endorsed the legitimacy of the statute and affirmed dismissal of the owner’s appeal.
This decision follows another recent appellate opinion affirming the Chapter 91 dismissal sanction, 1717 Realty Associates v. Borough of Fair Lawn, N.J. Superior Court Appellate Division Docket No. A-4666-07T2, which was reported in our New Jersey Property Tax Law blog on May 14, 2009.
