Kearny Tax Structure Upheld on Appeal

Name: McKirdy & Riskin, P.A.
Address: 136 South Street, Morristown, NJ, 07850
Telephone: 973-539-8900

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by: Anthony F. Della Pelle

4 Feb 2011

Property Owners’ Due Process Rights Not Violated by Kearny Tax Structure

A New Jersey appellate court has affirmed a Tax Court judge’s decision to dismiss a trade association’s complaint against the Town of Kearny. Plaintiffs argued that Kearny’s tax structure imposed charges for withheld services and created excessive assessments. Their complaint alleged Kearny’s tax structure was arbitrary and excessive, violated plaintiffs’ equal protection rights, violated New Jersey’s tax uniformity clause, was special legislation, and violated plaintiffs’ substantive due process rights. The Tax Court found plaintiffs’ complaint and amended complaint were “really tax appeals in disguise” because they sought to have the assessments lowered. He also found the plaintiffs’ 2007 complaint to be untimely for a 2007 and 2008 tax appeal because it was filed between the statutory permissible deadlines.

The Appellate Division found a “perceived a rational basis” for Kearny’s tax structure in its budget scheme which defeated the equal protection claims. It also found no evidence that the plaintiffs’ were not taxed at the same general rate as all other taxpayers in the municipality, and recognized that the utility charges were bills for services rendered and not taxes. The Appellate Division also failed to find evidence of a “conspiracy of extortionate taxation” that qualified as special legislation as defined in New Jersey’s Constitution in Article IV, Section VII, paragraph 9(6).

A copy of the Appellate Division’s opinion in Lincoln North Development Corp. v. Town of Kearny, A-2299-09T1 (January 28, 2011) 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.