Professional Holdings, L.L.C. v. Borough of South Plainfield

NOT FOR PUBLICATION WITHOUT APPROVAL OF

THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY

Mala Sundar R.J. Hughes Justice Complex

JUDGE P.O. Box 975

25 Market Street

Trenton, New Jersey 08625

Telephone (609) 943-4761

TeleFax: (609) 984-0805

taxcourttrenton2@judiciary.state.nj.us

January 13, 2014

BY ELECTRONIC MAIL

Paul Genato, Esq,

Archer & Greiner, P.C..

700 Alexander Park, Suite 102

Princeton, New Jersey 08540

Sandra Belli, Esq.

Jorge Sanchez, Esq.

DiFrancesco Bateman et al.

15 Mountain Boulevard

Warren, New Jersey 07059-5686

Re: Professional Holdings, L.L.C. v. Borough of South Plainfield

Block 55, Lot 3.01

Docket No. 013214-2013

Dear Counsel:

This is the court s opinion with respect to defendant s motion to dismiss the above-captioned complaint for plaintiff s failure to respond to income and expense information request pursuant to N.J.S.A. 54:4-34 ( Chapter 91 request ). Plaintiff ( Taxpayer ) contends that the Chapter 91 request was defective because (i) it was confusing as to the time periods for which the income and expense information was sought; (ii) it was undated thus left the Taxpayer

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confused about the computation of the 45-day time period for the response; and (iii) it required supplemental information which include the Taxpayer s opinion rather than facts of the income or expenses.

The court finds that the request was ambiguous as to the year for which the information was sought and the tax year for which the assessment was to be set with the information sought from the Taxpayer. Therefore, the defendant s motion is denied.

FACTS

Taxpayer is owner of property located at 1151 Park Avenue, designated as Block 55, Lot 3.01 ( Subject ) in defendant Borough of South Plainfield ( Borough ).

By an undated letter, the Borough s assessor sought income and expense information from Taxpayer pursuant to N.J.S.A. 54:4-34. The letter stated that the information was sought for the past tax year ending either December 31, referred to as calendar year or June 30, referred to as fiscal year or another acceptable year ending date you may be using. The letter stated that the chosen year ending was to be reflected both on the attached Annual Statement, and on Schedule A to that Statement. The Annual Statement indicated that the information was sought for annual period beginning Jan. 1, 2011 and ending on Dec. 31, 2011. The letter informed the Taxpayer that the information was to be used in determining the assessment for the property for the following tax year.

The cover letter required the Taxpayer to, among others, also complete and sign the Supplemental Information Request. This document asked, among others, that if you are not fully owner occupied do you consider your current leases to be at fair market value and if the response was yes then to explain why they are not at market value and/or why you feel the market rent should be. Also requested was information of what the Taxpayer feel[s] is the fair market value of your property.

The Chapter 91 request included a copy of the Second Official Copy Reprint of Senate Bill No. 309, which was Pre-Filed for Introduction in the 1979 Session by Senator Ewing. The Bill showed the changes to N.J.S.A. 54:4-34 (i.e., the words within bold-faced brackets and the words being italicized). Certain clauses of the italicized words contained asterisks and double asterisks. The bottom portion of the Bill explained that the words within the bold-faced brackets is not enacted and in intended to be omitted in the law. A hand-written notation Chapter 91, Laws of N.J. 1 979 Approved May 16 was on the left-hand side of the page.

The letter was sent to Taxpayer by certified mail return receipt requested on October 26, 2012. The return receipt indicates a date of delivery of November 2, 2012.

It is undisputed that the Chapter 91 request, the certified mailing receipt and the green card contained the correct name and address of the Taxpayer, as well as the correct identification of the Subject.

It is undisputed that the Taxpayer received the Chapter 91 request and did not respond to the same.

FINDINGS

N.J.S.A. 54:4-34 reads as follows:

Every owner of real property of the taxing district shall, on written request of the assessor, made by certified mail, render a full and true account of his name and real property and the income therefrom, in the case of income-producing property, and produce his title papers, and he may be examined on oath by the assessor, and if he shall fail or refuse to respond to the written request of the assessor within 45 days of such request, or to testify on oath when required, or shall render a false or fraudulent account, the assessor shall value his property at such amount as he may, from any information in his possession or available to him, reasonably determine to be the full and fair value thereof. No appeal shall be heard from the assessor's valuation and assessment with respect to income-producing property where the owner has failed or refused to respond to such written request for information within 45 days of such request or to testify on oath when required, or shall have rendered a false or fraudulent account. The county board of taxation may impose such terms and conditions for furnishing the requested information where it appears that the owner, for good cause shown, could not furnish the information within the required period of time. In making such written request for information pursuant to this section the assessor shall enclose therewith a copy of this section.

The court finds that the Chapter 91 request sent by the Borough is ambiguous. It requested income/expense information for the past tax year. However, the cover letter was undated so the Taxpayer would not know what the past tax year referred to.

Even if the past tax year could have been surmised to be 2011 because the Annual Statement asked for information for the twelve-month period of 2011, and further because the Chapter 91 request was received in 2012, the request is defective. The purpose of the Chapter 91 request was to provide assessors with additional authority to secure as much information as possible to aid in ascertaining the fair market value of income-producing property. In so doing, however, the Legislature obviously intended that the income data be sought prior to setting assessments to be forwarded to the county boards. Westmark Partners v. Township of Deptford, 12 N.J. Tax 591, 596-97 (Tax 1992); Delran Holding Corp. v. Township of Delran, 8 N.J. Tax 80, 83 (Tax 1985) (financial information sought by the assessor is for prospective use, to aid [the assessor] in determining, by way of the income approach the assessment to be levied ).

Here, the cover letter stated that the income/expense information was requested for purposes of setting the Subject s assessment for the next tax year. From the period indicated on the Annual Statement ( Jan. 1, 2011 to Dec. 31, 2011 ) the next tax year is 2012. However, the assessment date applicable for tax year 2012 would be October 1, 2012. Yet the request was mailed October 26, 2012.

It is likely that the assessor was seeking information to set the Subject s assessment for 2013. However, there is no such indication in the cover letter. The Taxpayer should not be asked to divine this information. Cassini v. Orange City, 16 N.J. Tax 438, 453 (Tax 1997).

The Borough argues that since the Chapter 91 request advised the Taxpayer that it could contact the assessor s office for any clarification regarding the information sought, the Taxpayer s total lack of response is fatal. While it may have been prudent practice for the Taxpayer to have contacted the assessor s office, it cannot be used to circumvent or mitigate the legislative burden placed upon a municipality to provide a clear and unambiguous Chapter 91 request.

The court finds the above reasons suffice to deny the Borough s motion. Therefore, it does not need to make any findings on the additional grounds urged by the Taxpayer.

CONCLUSION

For the foregoing reasons, the Borough s motion to dismiss the above-captioned complaint for failure to respond to a Chapter 91 income and expense request pursuant to N.J.S.A. 54:4-34 is denied.

An Order reflecting this memorandum opinion will be entered by the court and accompany this opinion.

Very truly yours

Mala Sundar, J.T.C.