Turnpike Liable for Roll-back Taxes on Farmland Assessed Property

by: Anthony F. Della Pelle
10 Jul 2014

Under the Farmland Assessment Act, a “roll-back” tax is imposed when farmland assessed property is converted to a non-agricultural or horticultural use.  See N.J.S.A. 54:4-23.8.  The rollback provision of the Farmland Assessment Act is intended to protect municipalities from land speculators who may try to receive a reduced assessment until the time is right to develop the property.  Additionally, there are exceptions for when the State or local government entities purchase farmland assessed property for recreation or conservation purposes.  In a recent Tax Court matter, the judge was asked to determine whether the New Jersey Turnpike Authority should be recognized as the “State” for purposes of this exception.

The Turnpike acquired property to widen and reconfigure a portion of Turnpike between interchange 6 to interchange 9.  The Turnpike was required to “mitigate” the impact on certain protected freshwater wetlands, and acquired property to do so.  For tax year 2010, a portion of the acquired property was assessed as farmland qualified, although it was undisputed that the Subject was not used for agricultural or horticultural or tree production/woodland management purposes after the Turnpike purchased it in 2010.

After a review of the relevant statutes, the court found that the Turnpike did not qualify as the State for purposes of avoiding roll-back taxes.  Because the Turnpike did not satisfy the “State” criteria for the roll-back exemption, the court did not further analyze the effect of the Turnpike’s purchase for mitigation purposes as potentially qualifying as an acquisition for “conservation and recreation” purposes.

A copy of the Tax Court’s published opinion in New Jersey Turnpike Authority v. Township of Monroe can be found here.

For more how the Farmland Act’s provisions have been analyzed previously by the Tax Court, please see the following blog posts:

Change of Use Required to Impose Rollback Taxes on Farmland Assessed Property

BMW’s Farmland Assessment Request Veers Off Course

Court Rejects Another Attempt To Deny Farmland Assessment