Municipality Swings and Misses on Chapter 91 Motion
Like a baseball player trying to knock one out of the part, local tax assessors try to knock tax appeals out of court with their mighty “Chapter 91” bats. You remember Chapter 91 it is the statute (N.J.S.A. 54:4-34) that allows tax assessors to request income and expense information from owners of commercial properties. Failure to respond or to timely respond to such a request is grounds for a motion to dismiss a tax appeal in the subsequent tax year. The Chapter 91 rules are pretty clear for both the assessor in issuing the demand and the taxpayer in responding. And the courts have been consistent in enforcing the statute as written. One key provision of the statute has to do with timing.
Sticking with our baseball motif I am reminded of the great Yogi Berra who once said: “You don’t have to swing hard to hit a home run. If you got the timing, it’ll go.” Of course, having some home run power helps. How does this relate to tax assessments and Chapter 91? Well, Chapter 91 has proven to be a powerful and effective tool for municipalities in getting tax appeals dismissed. However, as shown by a recent published opinion by the Tax Court, if the municipality does not get the timing right, it will swing and miss on a Chapter 91 motion.
The Tax Court recently denied a municipality’s motion to dismiss based on plaintiff’s failure to comply with a Chapter 91 request pursuant to N.J.S.A. 54:4-34 (“Chapter 91”).
In opposing the motion, the plaintiff alleged that its non-response was excused because the assessor’s request was not timely. While dated November 22, 2013, the assessor’s request did not reach the post office until November 29 and, more importantly, did not reach the plaintiff until December 2, which was too late to allow for the entire statutory 45-day response period under N.J.S.A. 54:4-34 to elapse prior to the January 10 deadline imposed by N.J.S.A. 54:4-35 for an assessor to submit the assessment list for the current tax year. It is well settled that Chapter 91 requests not made at least 45 days in advance of the January 10 deadline are defective.
But in this case, the Borough argued that the Chapter 91 request was not defective because the assessor did not submit his final Tax Assessment List until February 26, 2014, nearly seven weeks after the January 10 deadline.
The Borough’s argument presented an issue of first impression for the Tax Court. Does a defect exist in a Chapter 91 request, excusing the taxpayer’s non-response and precluding dismissal of its complaint, where the request is made 45 days before actual submission of the Assessment List, but less than 45 days prior to January 10?
The Tax Court agreed with the plaintiff that the Chapter 91 request was defective and denied the Borough’s motion to dismiss. Helping the court along was the fact that despite the Borough’s assertion that it had permission to file the tax list beyond the statutory deadline there was no evidence in the record showing that such permission was granted in accordance with N.J.S.A. 54:4-37.
So what would have been the outcome had the Borough received the necessary response to file its assessment list later than the January 10 deadline? The court stated that “[t]axpayers and their attorneys have a right to rely on January 10 as the deadline for submission of the assessment lists. If an extension is permitted, it should be made public knowledge.” The court found that without such notice, the submission date would remain a mystery and prevent attorneys from providing their clients with effective advice.
A copy of 440 Rt. 17 Partners, LLC v. Borough of Hasbrouck Heights may be found here.
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