South Plainfield’s Income and Expense Requests Ruled Defective
As discussed many times on this blog, Chapter 91 motions are frequently wielded by municipalities in hopes of dismissing tax appeals on income-producing properties. However, given the extraordinary relief of dismissing a tax appeal, courts have consistently ruled that municipalities must fully comply with all the requirements of N.J.S.A. 54:4-34 (“Chapter 91”) in order to warrant dismissal. One such requirement of the statute is that the request must be “both clear and unequivocal” so that the taxpayer may fully understand what financial information is being requested. In three recent decisions (Wade Realty Co. v. So. Plainfield; Northeast Realty v. So. Plainfield; Sun Pharmaceutical Ind. v. So. Plainfield), the Tax Court denied a series of Chapter 91 motions filed by South Plainfield (“Borough”) finding that the Borough’s Chapter 91 requests were defective as being ambiguous in terms of the information that was being sought by the assessor.
The relevant facts in all three cases were identical . In 2014, the Borough requested the income and expense information from plaintiffs via certified mail. Plaintiffs in all three matters did not dispute the fact that they received the Chapter 91 request. Plaintiffs also conceded that they did not respond to the assessor’s Chapter 91 request.
Despite plaintiffs’ non-compliance with the assessor’s Chapter 91 request, the Tax Court found that nowhere on the Borough’s Chapter 91 requests was there an indication of the specific year or period for which the financial information was being sought from the taxpayer. Although the Chapter 91 requests instructed that the taxpayer can use any form of accounting year, be it calendar, or fiscal, or “other acceptable year,” it failed to indicate exactly as to which year’s financial information was being requested. To make matters more confusing, there was no indication as to which tax year’s assessment was to be determined based on the unspecified year’s financial information. The Tax Court judge asserted that “[a]lthough the instant motion is for tax year 2015, and from the instant motion one can infer that the information was requested for use in setting the assessment for tax year 2015, the hindsight inference does not cure the total lack of clarity as to the year for which [plaintiff] was supposed to provide financial information.”
In Northeast Realty v. So. Plainfield, the Borough argued that the inclusion of the statute as part of the Chapter 91 request gave sufficient and clear notice as to which year’s income information was being sought by the assessor. The Tax Court however found no merit in the argument stating “[a] plain (or even a painstaking) reading of the statute does not fairly provide the taxpayer with notice of which year’s income and expense information should be provided, and the Borough’s Chapter 91 request does not make it any clearer.”
Given that many municipalities churn out Chapter 91 requests like a mill every year, one particular defect on a Chapter 91 request is often duplicated on all of the municipality’s Chapter 91 requests. In light of the error discovered by these decisions, South Plainfield will most likely revise their Chapter 91 requests going forward, so income-producing property owners seeking to appeal their assessments in the future are reminded not to ignore it.
