Tax Court Lacks Authority to Reduce Tax Payments and Penalties During Pending Appeals

The Presiding Judge of the New Jersey Tax Court recently held that N.J.S.A. 54:3-27 and N.J.S.A. 54:51A-1 do not authorize the court to reduce a taxpayer’s ongoing local property tax obligation and eliminate interest and penalties for failure to pay the total taxes due to the municipality.  Plaintiff filed a motion seeking a reduction in its local property taxes and protection from interest and penalties associated with any reduction until the pending tax appeal was resolved.

The court stated that it had the authority to reduce the amount of taxes due at the filing of a tax appeal “as the interests of justice may require,” but that the plain language of the statutes did not vest the authority to grant the requested relief.  The court also rejected the plaintiff’s argument that the payments are confiscatory and that due process requires a reduction in the plaintiff’s tax burden.  Additionally, the court highlighted the well established policy that the public interest requires the uninterrupted flow of tax revenues to a municipality while a tax appeal is litigated.

A copy of the Tax Court’s opinion in Sun Pipe Line, Co., v. Twp. of West Deptford, __ N.J. Tax __ (Tax Ct. 2010) can be found here.

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.