Carolyn Quigley v. Director, Division of Taxation

NOT FOR PUBLICATION WITHOUT APPROVAL OF

THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY

Patrick DeAlmeida R.J. Hughes Justice Complex

Presiding Judge P.O. Box 975

Trenton, New Jersey 08625-0975

(609) 292-8108 Fax: (609) 984-0805

April 27, 2012

Carolyn Quigley

234 Joseph Street

Lavallette, New Jersey 08735

Carl A. Wohlleben

Deputy Attorney General

Division of Law

R.J. Hughes Justice Complex

P.O. Box 106

25 Market Street

Trenton, New Jersey 08625-0106

Re: Carolyn Quigley v. Director, Division of Taxation

Docket No. 000050-2012

Dear Ms. Quigley and DAG Wohlleben:

This letter constitutes the court s opinion after trial in the above-referenced matter in which plaintiff challenges the final determination of the Director, Division of Taxation denying her application for a homestead property tax reimbursement for tax year 2010. For the reasons explained more fully below, the Director s decision is affirmed.

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I. Procedural History and Findings of Fact

Plaintiff Caroline Quigley, who is 85 years old and disabled, was unable to appear in person for the trial of this matter. To accommodate Ms. Quigley the court conducted the trial telephonically. Because this matter is assigned to the small claims division, the hearing was conducted pursuant to R. 8:11(a)(1), which provides that hearings shall be informal and the court may hear such testimony and receive such evidence as it deems necessary or desirable for a just and equitable determination of the case, R. 8:11 (b). Although the court did not have the opportunity to observe Ms. Quigley, the court finds that she was credible and provided testimony forthrightly and without evasion. Based on the evidence gathered during the trial, as well as the documents submitted by the parties prior to trial, the court makes the following findings of fact.

During 2010, Ms. Quigley owned the residence at 234 Joseph Street in Toms River Township. Ms. Quigley completed a timely application for a homestead property tax reimbursement for tax year 2010. The application indicated that the total 2010 property taxes paid by Ms. Quigley on her residence were $7,960.85 ($7,710.85 in taxes + $250 veteran s deduction). After application of her total base year property taxes of $4,210.27, Ms. Quigley sought a property tax reimbursement of $3,750.58.

On July 15, 2011, the Director issued a notice denying Ms. Quigley s homestead property tax reimbursement application. The reason for the denial was stated succinctly: We have been notified by your local tax collector that your property taxes were not paid in full by June 1, 2011. Undisputed evidence admitted at trial establishes that as of June 1, 2011 the total taxes due on Mr. Quigley s property for tax year 2010 were $7,710.85. Of that amount, as of June 1, 2011, Ms. Quigley had paid only $7,299.20. A outstanding balance of $411.65 remained due on June 1, 2011. That amount was paid on August 3, 2011.

On November 18, 2011, after an administrative appeal, the Director issued a final determination affirming the denial of Ms. Quigley s homestead property tax reimbursement.

On January 30, 2012, Ms. Quigley filed a timely appeal with this court challenging the Director s decision. In her Complaint, Ms. Quigley acknowledges that the taxes on her property were not paid in full on June 1, 2011. Ms. Quigley credibly testified that she suffered a knee injury in December 2010 and was in and out of rehabilitation during the first six months of 2011. She also testified that she physically was unable to pay her bills until her son traveled to New Jersey from out of State in August. The tax assessor s records, however, indicate payments of the taxes on the subject property were received on February 10, 2011 and April 28, 2011.

Ms. Quigley also testified that she spoke with an employee of the Toms River Township tax collector s office at some point during early 2011 to report that she was in rehabilitation and could not pay her outstanding taxes. According to Ms. Quigley, the employee told her it was okay to pay her outstanding taxes in August. Ms. Quigley did not identify the employee or provide written evidence memorializing the conversation.

II. Conclusions of Law

The court s analysis begins with the familiar principle that the Director s interpretation of tax statutes is entitled to a presumption of validity. Courts have recognized the Director s expertise in the highly specialized and technical area of taxation. Aetna Burglar & Fire Alarm Co. v. Director, Div. of Taxation, 16 N.J. Tax 584, 589 (Tax 1997) (citing Metromedia, Inc v. Director, Div. of Taxation, 97 N.J. 313, 327 (1984)). The scope of judicial review of the Director s decision with respect to the imposition of a tax is limited. Quest Diagnostics, Inc. v. Director, Div. of Taxation, 387 N.J. Super. 104, 109 (App. Div.), certif. denied, 188 N.J. 577 (2006). The Supreme Court has directed the courts to accord great respect to the Director s application of tax statutes, so long as it is not plainly unreasonable. Metromedia, supra, 97 N.J. at 327. See also GE Solid State, Inc. v. Director, Div. of Taxation, 132 N.J. 298, 306 (1993) ( Generally, courts accord substantial deference to the interpretation an agency gives to a statute that the agency is charged with enforcing. )

In addition, the Appellate Division has instructed this court to construe the statutes defining eligibility for homestead rebates narrowly. MacMillan v. Director, Div. of Taxation, 180 N.J. Super. 175, 178 (App. Div. 1981), aff d, 89 N.J. 216 (1982). [T]ax preference provisions are strictly construed against those claiming exemption. This is so with regard to local property taxes. It is also true with respect to state taxes. Ibid. (citations omitted). Where the homestead rebate statute is outspoken and unambiguous its terms must be strictly applied. Id. at 179. Accord Fedders Fin. Corp. v. Director, Div. of Taxation, 96 N.J. 376, 384-86 (1984); Vavoulakis v. Director, Div. of Taxation, 12 N.J. Tax 318, 329 (1992) , aff d o.b., 13 N.J. Tax 322 (App. Div. 1993).

In 1975, our Constitution was amended to authorize the enactment of laws to allow homeowners and residential tenants a rebate or a credit of a sum of money related to property taxes paid by or allocable to them at such rates and subject to such limits as may be provided by law. N.J. Const. (1947) Art. VIII, 1, par. 5. Since that time, the Legislature has enacted a series of homestead rebate programs for resident homeowners and tenants. Vavoulakis v. Director, Div. of Taxation, supra, 12 N.J. Tax at 323-24. Although the programs have had various names and eligibility requirements, the purpose of the programs has consistently been the beneficent purpose of alleviating the heavy realty tax burden. Rubin v. Glaser, 83 N.J. 299, 307, app. dis., 449 U.S. 977, 101 S. Ct. 389, 66 L. Ed. 2d 239 (1980).

A homestead property tax reimbursement is available to any person sixty-five or more years of age or who is disabled who meets certain income limits and who, as a homeowner, has made a long-term contribution to the fabric, social structure and finances of one or more communities in this State, as demonstrated through the payment of property taxes . . . on any homestead . . . used as a principal residence in this State for at least 10 consecutive years at least three of which as owner of the homestead for which a homestead property tax reimbursement is sought prior to the date that an application for a homestead property tax reimbursement is filed. N.J.S.A. 54:4-8.67. The amount of the reimbursement is the difference between the amount of property tax due in the year for which the reimbursement is claimed and the amount due in the base year. Ibid. The base year is tax year 1997 or the first year in which a claimant becomes eligible for a reimbursement after December 31, 1997. Ibid.

For purposes of the homestead property tax reimbursement tax year is defined as the calendar year in which a homestead is assessed and the property tax is levied thereon and it means the calendar year in which income is received and accrued. N.J.S.A. 54:4-8.67. In addition, a homestead must be a dwelling house which is owned and used by the eligible claimant as the eligible claimant s principal residence. Ibid. To qualify for the reimbursement, a claimant must own the residence, be 65 or over, and meet annual income limitations during the tax year at issue. Because the tax year is defined as the calendar year, a claimant must satisfy the statutory obligations as of December 31st of the tax year.

The Legislature limited the taxes eligible for reimbursement to those due and paid by June 1st of the year following the tax year for which reimbursement is sought. The controlling statute provides:

Property tax means the general property tax due and paid as set forth in this section, on a homestead, but does not include special assessments and interest and penalties on delinquent taxes. For the sole purpose of qualifying for a benefit under P.L. 1997, c. 348 (C.54:4-8.67 et seq.), property taxes paid by June 1 of the year following the year for which the benefit is claimed will be deemed to be timely paid.

[N.J.S.A. 54:4-8.67.]

As of June 1, 2011, the taxes due on the subject property were $7,710.85. However, as of June 1, 2011 the taxes paid were $7,299.20. A outstanding balance of $411.65 remained due on June 1, 2011. According to the Director s interpretation of N.J.S.A. 54:4-8.67, a taxpayer is not eligible for a homestead property tax reimbursement unless all taxes due for the relevant tax year are paid by June 1, 2011. Under the Director s reading of the statute, a reimbursement is not available where only a portion of the taxes due have been paid by June 1, 2011, even if, as is the case here, the partial payment made by June 1, 2011 exceeds the base year amount.

The Director s interpretation of the statute is entirely reasonable. The Legislature limited the reimbursement benefit to those taxed due and paid by June 1st. Certainly, one reasonable interpretation of that language is that the entire amount due must be paid by June 1st for the taxpayer to be eligible for the reimbursement benefit. Another interpretation of the statute that the reimbursement is available for any taxes due and paid by June 1st, even if less than the full amount due is paid may also be considered reasonable. The Director, however, is entrusted with the statutory authority to implement the homestead property tax rebate reimbursement laws. In light of the Director s expertise and the deference to which he is entitled by the judicial branch, the court may not interfere with the Director s reasonable interpretation of those laws, even if other reasonable interpretations may exist.

Ms. Quigley argues that her disability militates in favor of the award of the reimbursement benefit. She points to no statute, however, that would allow for an exception to the June 1st tax payment requirement in N.J.S.A. 54:4-8.67 based on disability. The statute itself contains no language allowing for an exception to the June 1st date.

Nor is the court convinced that Ms. Quigley s disability made it impossible for her to pay her taxes in a timely fashion. While the court has no reason to doubt the credibility of Ms. Quigley s testimony that she was in and out of a rehabilitation facility in the first six months of 2011, the evidence indicates that the Toms River Township tax collector received two tax payments for Ms. Quigley s property during that period. In addition, Ms. Quigley filed a timely application for the homestead property tax reimbursement on April 2, 2011. There is no precise evidence in the record with respect to the dates on which Ms. Quigley was in the rehabilitation facility, whether she was an in-patient on June 1, 2011, and whether any inability to make the payment endured to August 3, 2011, when the outstanding 2010 taxes were finally paid.

The fact that Ms. Quigley may have spoken to an employee of the Toms River Township tax collector s office does not change the outcome of this matter. As a threshold observation, the record contains no evidence identifying the person to whom Ms. Quigley spoke or the exact content of their conversation. During trial Ms. Quigley could not even identify the place at which the person worked, claiming she was an employee of the county, the municipality or possibly the Director. It seems most likely to the court, based on the testimony, that Ms. Quigley spoke with an employee of the Toms River Township tax collector s office, the only entity that would be responsible for the collection of Ms. Quigley s quarterly local property tax payments.
According to Ms. Quigley s written submissions she called the tax office and let them know of my dilemma and they told me not to worry that they would document it. This statement, even under the most favorable light for Ms. Quigley, is equivocal. At best, the employee expressed her acknowledgment that the tax collector was put on notice that Ms. Quigley would be making a late payment. During trial Ms. Quigley stated that the employee told her it was okay to make a late payment. This statement is also equivocal, given that the tax collector is statutorily authorized to accept late payments and assess interest for the delinquency. Indeed, the record contains evidence that Ms. Quigley was assessed interest by the tax collector in February 2011, April 2011, and August 2011. The employee s statement to Ms. Quigley is not indicative of forgiveness of Ms. Quigley s taxes or an adjournment of her payment date without consequence. Nor would an employee of the tax collector be authorized to relax the June 1st deadline in N.J.S.A. 54:4-8.67. That deadline was set by the Legislature as a condition for the receipt of a homestead property tax reimbursement. A municipal employee lacks the statutory authority to excuse that unequivocal provision of State law.

The fact that Ms. Quigley may have believed that her late payment of taxes would not jeopardize her homestead property tax reimbursement is not material to the court s decision. Every person is conclusively presumed to know the law; ignorance is no excuse. Schirmer National Co. v. Dir., Div of Taxation, 17 N.J. Tax 495, 502 (Tax 1998), aff d, 17 N.J. Tax 47 (App. Div. 2000). A statute does have the effect, immediately upon its enactment, of giving notice to all persons that the law will be as set forth in the statute, on and after the specified date for it to come into effect. Brasko v. Duchek, 127 N.J. Eq. 567, 14 A.2d 477 (Prerog. Ct.1940). Ms. Quigley is charged with knowledge of the statutory requirement for a homestead property tax reimbursement.

The court is not unsympathetic to Ms. Quigley s circumstances. The homestead property tax reimbursement is a valuable benefit designed for elderly and disabled taxpayers like Ms. Quigley. There is no doubt in the court s mind that Ms. Quigley went through a difficult period during the first six months of 2011 and faced unusual obstacles in attending to her financial affairs. The Legislature, however, established clear parameters for eligibility for the homestead property tax reimbursement, including a requirement that to be eligible for reimbursement all taxes due on the property must be paid by June 1st of the year following the year for which reimbursement is sought. Ms. Quigley did not satisfy that condition.

The Legislature is accorded significant leeway when enacting a tax benefit and authorizing the expenditure of State funds. It exercised its prerogative to limit reimbursement to taxes paid on or before a specified date. A payment eligibility date makes perfect sense, as the Legislature must determine the amount of benefits a reimbursement program can be expected to entail for annual budgeting purposes. As noted above, the Director has interpreted the controlling statute in a reasonable fashion. The court lacks the authority to rewrite the statute or excuse the June 1st statutory eligibility provision, even if, as Ms. Quigley argues, she was under the impression that her difficulties excused her late payment. It is this court s obligation to enforce tax statutes as reasonably interpreted by the Director, regardless of whether a different reasonable interpretation of the statute might accommodate a particular taxpayer or better accomplish the stated goals of the law.

A Final Judgment affirming the Director s Final Determination is enclosed.

Very truly yours,

Patrick DeAlmeida, P.J.T.C.