Income and Expense Verification Requests in New Jersey Property Tax Appeals
A law known as “Chapter 91” allows municipal property tax assessor’s to request income and expense information from a New Jersey property owner in order to assist in determining property “values” for its tax assessment. While this, standing alone, does not seem overly burdensome, if the property owners fail to respond to the assessor’s request pursuant to Chapter 91, property owners are barred from appealing their property tax assessment.
However, the law has strict provisions which must be followed by municipal assessors and taxpayers. The municipal assessor must send the request for income and expense information in writing, and the request must be sent via certified mail. The assessor must include a copy of the applicable statute with the written request. Moreover, the assessor’s request can only be made for properties which are producing income. The property owner must respond in writing to the assessor’s request within 45 days, and if he fails to do so, will not be permitted to file an appeal of the assessment. However, if the taxpayer fails to respond, the municipal assessor is still required to determine the full and fair market value of the property utilizing all available information. Additionally, the statute does include an exception, wherein if the property owner had good cause for being unable to provide the requested information, the applicable county tax board may take that into consideration.
Courts have construed the requirements imposed on the municipal tax assessor very strictly, due to the property owner’s resultant loss of the right to appeal if she fails to respond. New Jersey’s Tax Court has ruled that if the assessor does not comply with every requirement of the statute, “renders the statute inapplicable.” SAIJ Realty, Inc. v. Town of Kearny, 8 N.J.Tax 191, 197 (Tax 1986), including the provisions requiring the request be sent by certified mail and that a copy of the statute be included with the request. However, if the municipality meets the requirements of the law, the burden shifts to require the property owner to strictly comply with her obligations under the law, particularly responding in writing within 45 days.
New Jersey courts have consistently construed the law against property owners even in situations where it seems unjust. For example, even if the assessor’s request is overbroad or illegal, as long as the assessor has met the statute’s requirements, a property owner’s failure to respond can still result in loss of the right to appeal. The taxpayer is then required to respond to those requests which are not objectionable and advise the municipal assessor as to why the remaining requests are improper. Moreover, a property owner must still respond the properly sent request even if the request is made of a non-incoming producing property. The Tax Court has even held that failure to respond to a request, even when the request is made as to non-income producing property, will result in the taxpayer’s loss of its right to appeal the assessment. Furthermore, the Appellate Division of New Jersey’s Superior Court upheld the loss of the right to appeal where the taxpayer sent a response after the 45 days had expired. The Appellate Division also ruled that an appeal was properly dismissed where the requested information was provided to the attorney for the municipality, but not the assessor. These decisions were all justified because of the important governmental interest and the statute’s mandatory wording.