The Sentinel Publishing Co. v. Borough of Lake Como et al.

NOT FOR PUBLICATION WITHOUT APPROVAL OF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

February 12, 2015

BY ELECTRONIC MAIL

Marc S. Galella, Esq.

R.C. Shea & Associates, P.C.

244 Main Street, P.O. Box 2627

Toms River, New Jersey 08754

Harry Haushalter, Esq.

Lexington Square Commons

2119 Route # 33, Suite A

Hamilton Square, New Jersey 08690

Re: The Sentinel Publishing Co. v. Borough of Lake Como et al.

Block 24, Lot 11, Unit C0001 to 0007

Docket No. 015556-2014

Dear Counsel

This is the court s opinion with respect to Sentinel s summary judgment motion seeking a voidance of defendant s assessments of $250,000 upon each of the seven antennas located on the above referenced property. Sentinel contends that neither defendant (the Borough or its assessor, collectively referred to here as Borough ) had the jurisdiction to impose the assessments because the antennas are statutorily exempt from tax as business personal property under N.J.S.A. 54:4-1 (the Business Retention Act). Defendants cross-moved for summary judgment contending that Sentinel s remedy in this regard was to have filed a timely appeal, and further that relief is not available under the Correction of Errors statute, N.J.S.A. 54:51A-7.

For the reasons stated below the court finds that the complaint is untimely, therefore it must be dismissed for lack of subject-matter jurisdiction.

FACTS

Facts are taken from the affidavit of Sentinel s ( Sentinel ) officer, the Vice President for Radio Engineering, and filed in support of Sentinel s summary judgment motion. The Borough admits to the fact of the assessments and that the property subject to the assessments were seven antennas. It maintains that it is without knowledge as to Sentinel s several other allegations concerning the physical description, location, and ownership of the antennas, and therefore cannot admit to their veracity. Since the issue here is whether this court has subject matter jurisdiction, or whether the complaint states a cause of action under the Correction of Errors statute, the court will recite the facts pertaining to the antennas but is not deeming the same to be uncontroverted or proven.

Sentinel owns the property located at Block 24, Lot 11 in the Borough. The property is improved with a building housing an FM broadcast radio station called WRAT-FM, accompanied by a 245-foot high self-supporting tower with 14 antennas. These antennas are used in connection with various telecommunications uses; five, which are not owned by Sentinel, are used by and for third-party cellular telephone operations; two are used by Sentinel as FM broadcast antennas, one as primary and one as a backup; and the rest are used in connection with the operations WRAT-FM, and also by the Borough for police, fire and the like.

In November 2013, Sentinel received seven assessment notices from the Borough. They identified the building as Antenna # (thus Antenna #1 to Antenna #7 ). They described the Land Dimensions as Tower. Each Antenna was assessed at $250,000. 1

On October 1, 2014, Sentinel filed an appeal with the Tax Court against the assessments on the seven antennas. On the Case Information Statement ( CIS ), Sentinel identified the case type as Correction of Error. 2 The complaint alleged two counts for relief, one against the Borough and one against the assessor, but making the same allegations, namely, that the antennas, as business personal property, are exempt from local property tax under N.J.S.A. 54:4-1 and Emmis Broadcasting Corp. v. Borough of East Rutherford, 14 N.J. Tax 524 (Tax 1995), aff d, 16 N.J. Tax 29 (App. Div.), certif. denied, 147 N.J. 263 (1996), therefore, the Borough s and assessor s actions were lacking jurisdiction and were not permitted by statute and thus ultra vires. The complaint requested the court to determine that, (i) the antennas were personal property; (ii) the Borough and assessor s actions were statutorily unauthorized; (iii) the Borough and assessor s actions were ultra vires; and, (iv) Sentinel is entitled to a refund of all taxes. Nowhere in the actual complaint is there any claim for relief under, or reference to, the Correction of Errors statute. Nor did it comply with the requirements in this regard.3

Sentinel s summary judgment motion follows the allegations in its complaint. It argues that its facts mirror those in Emmis, except that the towers in Emmis were the antennas themselves whereas here, the antennas are separately mounted onto the tower. Regardless, per Sentinel, the ruling in Emmis applies here, therefore this court must find the antennas are tax-exempt machinery, apparatus, and equipment.

The Borough s cross-motion asserts that Sentinel should have, but did not, file a timely appeal challenging the assessments as required by N.J.S.A. 54:3-21, and further that Sentinel is foreclosed from any relief because the Correction of Errors remedy is unavailable to rectify the assessments.4 Sentinel did not file any opposition or response to the Borough s cross-motion.

ANALYSIS

Under N.J.S.A. 54:3-21(a), a taxpayer feeling aggrieved by the assessed valuation of its property must file an appeal on or before April 1, or 45 days from the date when the bulk mailing of notification of assessment is completed in the taxing district, whichever is later. The appeal can be filed with the county board of taxation, or if the assessed valuation . . . exceeds $1,000,000, with the Tax Court. Ibid. If however, there has been a revaluation, then the time to file an appeal is on or before May 1. Ibid.

If a municipality is located in a county where the county board of taxation is participating in the demonstration program pursuant to N.J.S.A. 54:1-104, the appeal deadline to the county board of taxation is January 15, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever date is later . . . N.J.S.A. 54:3-21(a)(2). A direct appeal to the Tax Court is still the later of April 1 or 45 days from the completion date of the bulk mailing of notification of assessment, provided the assessed valuation exceeds $1,000,000. Ibid.

Sentinel received the assessment notices sometime in November 2013. It filed an appeal with this court only on October 1, 2014. Thus, under any of the above statutory deadlines, it is undisputed that Sentinel did not file a timely appeal. Statutory filing deadlines are strictly construed against the filer. F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418 (1985). The courts are not at liberty to relax the same. Prospect Hill Apartments v. Borough of Flemington, 1 N.J. Tax224, 227 (Tax 1979).

Sentinel maintains that N.J.S.A. 54:3-21(a) does not apply because it is asking this court to void the Borough s illegal or unauthorized assessments for which complaint there is no statute prescribing any time limits. Thus, the only obstacles to this court entertaining the complaint are the principles of either laches or estoppel. Per Sentinel, neither principle (un-asserted by the Borough) applies because as soon as Sentinel was legally advised in September 2014 that law prohibits tax upon business personal property, it filed this complaint in October 2014.

The court is unpersuaded. First, the statutory scheme does not specifically list or provide that antennas are excluded from being assessed and taxed. Rather, it contemplates taxing all property in the State, both real and personal. N.J.S.A.54:4-1. Taxable real property includes personal property affixed to the real property or appurtenance thereto unless it meets certain tests or qualify as tangible business personal property. N.J.S.A.54:4-1(a); (b). The regulations echo the statute. N.J.A.C.18:12-10.2(b) ( for purposes of local property taxation, real property includes personal property affixed to real property or an appurtenance if it meets certain criteria, and includes machinery apparatus or equipment which is used or held for use in business, unless it does not meet certain additional qualifications).5

Thus, tangible business personal property is not automatically excluded from being assessed and taxed as real property. Rather, in the absence of any countervailing evidence . . . personal property affixed to real property is presumptively taxable. Township of Freehold v. Javin Partnership, 15 N.J. Tax 88, 94 (Tax 1997).6 Additionally, there is a presumption that an assessment made by the proper authority is correct. Aetna Life Ins. Co. v. City of Newark, 10 N.J. 99, 105 (1952). Therefore, an assessor s decision to treat personal property as real property, and his or her consequent assessment in this regard, is not void ab initio. Thus, Sentinel s assumption that the seven antennas can never be considered as real property is flawed.

Second, courts have consistently ruled that challenges to assessments as being illegal, ultra vires, or void, are not immune from compliance with the statute of limitations. For instance, this court ruled that a church s failure to challenge the assessments resulting from a denial of a statutory tax-exemption under the law governing the timeliness of appeals, including N.J.S.A. 54:51A-1(a), was fatal to its claim of tax exemption due to the importance of meeting statutory appeal deadlines in tax matters. Newark City v. Block 322, Lots 38 and 40, 17 N.J. Tax 103, 106 (Tax 1997). The court noted that failure to file timely appeals after receiving the notices of assessments does not permit the[ir] voiding not only because there was no statutory authority to do so but also because allowing such a relief would create an unlimited statute of limitations. Ibid.

Similarly, in State v. Borough of Eatontown, 366 N.J. Super. 626 (App. Div. 2004), the court rejected that State s argument that the statute of limitations in N.J.S.A. 54:4-63.11 for appealing an added assessment was never triggered because the assessments were against a tax-exempt entity (the State), and thus, were ultra vires. Affirming the Tax Court s dismissal of the complaints as untimely, the Appellate Division ruled that the State s failure to comply with the statute of limitations foreclosed its ultra vires argument. Id. at 635. The Appellate Division agreed with the Tax Court s holding that a municipality should . . . not be put to the disadvantage of having to have special limitations for special taxpayers. Id. at 635.

The same principles apply to a non-government taxpayer. In Royal Bradley Associates v. Borough of Bradley Beach, 252 N.J. Super. 401, 404 (App. Div. 1991), the court rejected an argument that the statute of limitations applicable to the appeal of added assessments was inapplicable because the assessments were invalid and void ab initio. It ruled that subject-matter jurisdiction required strict compliance with statutory appeal procedures. Id. at 403-04. See also Macleod v. City of Hoboken, 330 N.J. Super. 502, 507 (App. Div. 2000) (rejecting an argument of the inapplicability of the statute of limitations on grounds that the assessments in question were illegal spot assessments thus void from inception, and noting that the case which the movant had relied upon for this proposition was one where the taxpayers had filed a timely complaint).

Sentinel contends that its position is different from above precedent because: (i) N.J.S.A.54:3-21(a) provides a limitations period to a taxpayer against an assessed valuation (emphasis added) but Sentinel is not contesting the valuation placed by the assessor on the seven antennas. Therefore N.J.S.A. 54:3-21 does not apply; (ii) in cases involving denial of a tax-exemption, the taxpayer has the burden of initially applying for and receiving the exemption, therefore, it is on notice that if or when its exemption request is denied, an assessment will follow. However, an owner of business personal property such as Sentinel, has no such initial or continuing obligation to seek an exclusion from tax. Therefore, it is not on notice that its tax-exclusion status can possibly or potentially change.

Neither argument is persuasive. An assessor is statutorily bound to place an assessment on every piece of real property in the State according to its true value. N.J.S.A. 54:4-23. The tax exemption or exclusion arises thereafter. The exemption or exclusion is from payment of the local property tax not from the property being assessed according to true value.

Thus, although procedurally, an assessor must separately include a property in either the tax list or tax-exempt list, both lists must include information as to the true value of the property as allocated to land and improvements. See N.J.A.C. 18:12-2.8(a)(1)(ii) (detailing the information to be included in the real property tax list, including land taxable value and improvements taxable value ) and N.J.A.C. 18:12-3.1(b)(2) (detailing the information to be contained in the tax exempt property list including true value of the land to which an exemption has been granted and true value of all buildings and improvements to which an exemption has been granted ).7 While the regular tax list requires inclusion of taxable value and the tax-exempt list requires inclusion of true value, this is a distinction without a difference because taxable value for local property tax purposes, is the property s true value. N.J.S.A. 54:4-23.

Moreover, whether there is an assessment as a result of a denial of tax-exemption or due to treatment of business personal property as taxable real property, and assessor must, by law, provide timely notices of assessment. N.J.S.A. 54:4-38.1. This is so that taxpayers are made aware of the assessments imposed upon their property or any changes, and thus, have ample notice . . . [of] their appeal rights prior to the April 1 filing deadline since the tax bills would not reflect the current year s assessment until much later. Centorino v. Township of Tewksbury, 18 N.J. Tax 303, 301-11 (Tax 1999).

Once the assessment notices are sent, the statute of limitations under N.J.S.A. 54:3-21(a) is triggered (the statute implicated here, for regular assessments). In this regard, a taxpayer who claims an exemption from an assessment falls within the category of an aggrieved person and therefore, must comply with the time-to-file requirements of that statute. See N.J. Transit Corp. v. Borough of Somerville, 139 N.J. 582, 588 (1995). See also Borough of Eatontown, supra, 366 N.J. Super. at 635 ( whether the assessments on State owned-property were utterly beyond the jurisdiction of the municipalities or merely an irregular exercise of a basic power became an issue when the State received the notices of assessments, and the State s challenge to the same as ultra vires could and should have been raised by a timely appeal. ). Thus, Sentinel s arguments that tax-exemption matters are different solely because the taxpayer must initiate the tax-exemption process under N.J.S.A. 54:4-4.4, and is somehow on a different plane of notice or awareness, is unavailing. Note that failure to file or timely file exemption claims under this statute is not fatal to an appeal from an assessment imposed upon the allegedly exempt property. Emmanuel Missionary Baptist Church v. City of Newark, 1 N.J. Tax 264, 267-68 (Tax 1980).

Therefore, when an assessor decides to treat certain property as real property, such as here, the assessor must value the same, which is his or her assessed valuation for purposes of N.J.S.A. 54:3-21(a)(1). Further, as of the valuation date, the assessor must determine not only taxable value, but also taxable status. State by Comm r of Transp. v. Township of Pohatcong, 9

N.J. Tax 528, 540 n.4 (Tax 1988) (citations omitted). Thus, and because of this confluence, N.J.S.A. 54:3-21(a)(1) provides a remedy against not only the regular assessment placed by the assessor but also the assessor s decision or omission to account for the property s taxable status provided an appeal in this regard is timely filed.8 Therefore, precedent cited above, addressing challenges to assessments as being void ab initio, squarely apply to Sentinel s case.

In sum, the fact that Sentinel is crafting its argument as only challenging the Borough s treatment of business personal property as lacking jurisdiction, does not entitle Sentinel to an unspecified time limit for filing an appeal. Nor does such argument immunize Sentinel from complying with the time requirements of N.J.S.A. 54:3-21(a). Allowing such relief goes against the well-established principle that [s]trict adherence to statutory time limitations is essential in tax matters, borne of the exigencies of taxation and the administration of local government. F.M.C. Stores, supra, 100 N.J. at 424-25. A township has significant interest in ascertain[ing] the amount of taxable ratables within its jurisdiction in order that it might adopt a responsible and fairly accurate budget. Township of Galloway v. Petkevis, 2 N.J. Tax 85, 92 (Tax 1980). The policy considerations underlying N.J.S.A. 54:3-21, namely, that a township has the right to rely on the repose of the statute of limitations for purposes of predictability of revenue and sound administration of local government, applies equally where the assessments are untimely challenged as being void or ultra vires. Borough of Eatontown, supra, 366 N.J. Super. at 636, and n.4.

CONCLUSION

For the aforementioned reasons, Sentinel s summary judgment motion is denied. The Borough s cross-motion is granted. Sentinel s complaint is dismissed for lack of subject-matter jurisdiction.9

A final Order and Judgment reflecting the denial and grant respectively will accompany this memorandum opinion.

Very truly yours,

Mala Sundar, J.T.C.

1 The Borough did not impose assessments on any of the antennas for either 2013 or 2015. The 2015 land assessment for Block 24, Lot 11 increased from $452,000 to $1,952,000. Per Sentinel, this increase shows that the assessments of six antennas (at $250,000 each) were re-allocated to the land value since the allocated land value in tax years 2013 and 2014 was $452,000.

2 Sentinel s counsel claimed he did not know which box to check off to label the nature of the complaint so he used the Correction of Errors box (although there was a box Other ). He also agreed that inclusion of 2013 tax year on the CIS was a mistake.

3 N.J.S.A. 54:51A-7 requires that a Correction of Errors complaint shall set forth the facts causing and constituting the error or errors and mistake or mistakes, or either thereof sought to be corrected and that such facts be verified by affidavits submitted by the Sentinel.

4 The Borough presumably asserted a defense against application of the Correction of Errors statute since Sentinel s CIS lists the complaint as one for Correction of Errors.

5 These tests provide the basis for deciding when an item of business personal property becomes real property. General Motors Corp. v. City of Linden, 150 N.J. 522, 545 (1997) (Handler, J. concurring).

6 The statute does list some business property as either personal or real property. See e.g. N.J.S.A. 54:4-1 (intangibles are non-taxable personal property); N.J.S.A. 54:4-1.8 (trailers are not real property); N.J.S.A. 54-1.12 (storage tanks of certain capacity are deemed real property); N.J.S.A. 54:4-1.20 (billboards are treated as real property). Absent is any delineation for antennas. Nonetheless, the law does not foreclose an assessor from deciding to treat an item of business personal property as real property. Rather, the statute envisages a presumptive taxability with the burden upon the taxpayer to establish the contrary. See General Motors Corp. v. City of Linden, 20 N.J. Tax 242 (Tax 2002) (analyzing several business personal property items of a car manufacturer to determine whether they were non-taxable personal property or otherwise for purposes of N.J.S.A. 54:4-1).

7 The exempt property list must be inserted in the back portion of the regular tax list and duplicate. N.J.A.C. 18:12-3.1(b)(2)(x).

8 If the assessor makes an added or omitted assessment, the time limits of those statutes will apply to challenge the valuation and/or taxable status.

9 The court need not address the Borough s unopposed contentions that the Corrections of Errors law, N.J.S.A. 54:51A-7, does not allow the court to consider the merits of Sentinel s complaint. The court notes however that the statute was not intended to be used for settlement of challenges of an assessor s opinion as to value of a parcel of real property or the assessment of property as real property. State Revenue, Finance and Appropriations Committee, Statement to Senate Bill No. 1103, at 1-2 (Sept. 18, 1978).

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