Be Fair or Be Square: Tax Court Denies Township’s Motion to Dismiss

What happens when an unstoppable deadline meets an immovable legal doctrine? A riveting case from the Tax Court of New Jersey, of course!

In H N Realty Inc. v. Township of South Brunswick, a property owner missed a critical deadline for answering a request for property information. This ordinarily would’ve prevented an appeal of the property’s tax assessment. Miraculously, the taxpayer’s appeal survived anyway. Let’s find out why!

Overview

H N Realty owns income producing property in South Brunswick. In late August 2024, South Brunswick sent a Chapter 91 request for income and expense information to the taxpayer. The taxpayer didn’t respond until early January 2025 by asking for another copy of the Chapter 91 form. The taxpayer received the form and filed it before the tax assessor’s deadline of January 10. Yet when the taxpayer filed a property tax appeal, the municipality filed a motion to dismiss because the first request wasn’t answered within 45 days.

The 45 Day Countdown

Chapter 91 requests, which are inquiries sent by townships for income and expense information on income producing properties, have a 45-day period for taxpayers to respond. Failure to respond within the 45 days triggers N.J.S.A. 54:4-34, barring the right to appeal a property’s tax assessment. This incentivizes taxpayers to respond to these requests, helping ensure that local taxing authorities have the information they need to impose fair assessments.

How strict is Chapter 91’s deadline? Responding even one day late will completely bar an appeal of a tax assessment. While taxpayers who fail to respond within 45 days can still participate in a reasonableness hearing, this is much narrower in scope compared to a tax appeal. Reasonableness hearings are generally limited to the underlying data and the methodology used by assessors.

With such a strict deadline, you might think the cards were stacked against the taxpayer in this case. But wait until you see what it has up its sleeve…

Turning Square Corners

While the tax court takes deadlines very seriously, it also strongly enforces the square corners doctrine. This doctrine requires municipalities to “turn square corners” when dealing with the public by acting with fairness, honesty, and transparency. If a government official gives the impression that a certain action is acceptable when it isn’t, the government may be estopped from later penalizing someone for relying on that impression.

Court’s Analysis

The court acknowledged the 45-day deadline for responding to Chapter 91 requests. However, applying the square corners doctrine, it determined that the tax assessor had a duty to inform the taxpayer that any response would be deemed untimely. By failing to provide this notice, the township did not meet the requirements of the doctrine. The court emphasized that the township gained an unfair advantage, as the taxpayer—motivated by the prospect of appealing the assessment—submitted information it was not obligated to disclose. The court clarified that bad faith is not a prerequisite for the square corners doctrine to apply.

Decision

Considering the above facts, the court ruled that the 45-day clock reset when the taxpayer received the second copy of the Chapter 91 request. Since the taxpayer promptly responded, the court denied the township’s motion to dismiss and allowed the appeal to proceed.

Takeaways

This case underscores the high standard of conduct to which government agencies are held. Just as taxpayers are expected to act with honesty and integrity, local governments must uphold the same principles. When they fall short, they will be held accountable. Nonetheless, taxpayers should remain vigilant about deadlines, particularly the strict 45-day rule under Chapter 91.

To read the court’s full opinion, click here.