Property Owner’s “False” Responses Lead to Dismissal of Tax Appeal
A recent decision by the Tax Court held that a property owner’s failure to include information concerning a concession lease for a 3,000 sq. ft. area within a skating rink was a “false or fraudulent account” under N.J.S.A. 54:4-34 (Chapter 91 Request). The property owner answered the Township of Mt. Laurel’s Tax Assessor’s request for Chapter 91 information for the 2010 and 2011 tax years by stating that the property was owner-occupied. However, the property owner later provided discovery in the form of a lease which indicated that the property generated some rental income in the 4% of the property occupied by a concession stand. The Township then filed a motion to dismiss for providing a false response to the assessor’s request for the 2010 tax year. That motion was granted and the Township filed another motion to dismiss the 2011 appeal.
The Tax Court rejected the property owner’s argument that Great Adventure, Inc. v. Twp. of Jackson, 10 N.J. Tax 230 (App. Div. 1988), was controlling because the Great Adventure court was not asked to resolve what impact the concession leases had on the theme park’s status as owner-occupied, and Jackson conceded that it was considering the park’s value based on its totality and not its parts. Instead, the Tax Court noted that the language of the Chapter 91 statute “plainly requires a property owner to report all incomes realized from the subject property, and no de minimis exception exists in the statute which would permit a tax payer to only provide the information when the entire property generates rental income. Instead, a tax payer must always “render a full and true account” to the assessor because it is the assessor’s job to determine what information is relevant, and not the tax payer’s. Additionally, the information must be provided directly to the tax assessor because the courts will not require an assessor to “be charged ‘with knowledge of information in the hands of other municipal entities.
Municipalities often use N.J.S.A. 54:4-34, or Chapter 91, to attack property owners’ tax appeals procedurally, rather substantively on the question of whether the property is over-assessed. The statute requires tax assessors to meet certain burdens when requesting income and expense information from property owners, and is often an effective weapon in the municipal arsenal to counter tax appeals.
A copy of the New Jersey Tax Court’s opinion in Community Sports Partners II, LLC v. Twp. of Mount Laurel, Docket No. 009012-2011 (Tax Ct. 2011), can be found here.
For more on Tax Court opinions in Chapter 91 cases, please see the following blog posts:
Property owner survives Verona’s “Chapter 91″ attack
Chapter 91 Strikes Another Taxpayer
Tax Court Denies Phillipsburg’s Chapter 91 Motion to Dismiss
