As a reminder to everyone in New Jersey who recently received a 2007 omitted-added assessment bill and/or a 2008 added assessment bill, the deadline to appeal such assessment is THIS MONDAY, December 1, 2008.

This means that the County Board of Taxation must actually RECEIVE your filed petition contesting the 2007 omitted-added assessment or 2008 added assessment by Monday. Merely mailing your petition by Monday is insufficient. If the County Board does not receive your petition by December 1, 2008, the County Board will almost for certain not hear your appeal and you will be jurisdictionally barred from appealing your assessment to the Tax Court of New Jersey.

If you are unsure whether or not you have a claim, I strongly suggest that you file your appeal now in order to preserve your rights. After you file your petition, you could always investigate your rights further by contacting a Property Tax Attorney who specializes in this area of law.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

On July 7, the Appellate Division affirmed the Tax Court of New Jersey’s decision in Wee Love, Inc. v. Township of Maple Shade. In so doing, the Appellate Division agreed with the Tax Court that the day-care facility at issue in that case is a school for purposes of the local property tax exemption under N.J.S.A. 54:4-3.6. The Tax Court found, and the Appellate Division agreed, that due to the fact that virtually all of the plaintiff’s building was used by preschool children, the predominant use of the building was as a school, even though at times some portion of the building was occupied by participants in before- and after-school programs. The Appellate Division also noted that there was substantial credible evidence to support the Tax Court’s conclusion that the entire premise was exempt because the predominant use was as a school.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

On Monday, the New Jersey Supreme Court decided Hunterdon Medical Center v. Township of Readington. In a thirty-five page published opinion, the New Jersey Supreme Court affirmed a new test first put in place by Judge Kuskin of the Tax Court. The Supreme Court used this new test in order to discern whether the hospital at issue was in fact a “hospital” eligible for property tax exemption. In so doing, the New Jersey Supreme Court redefined the term “hospital” itself.

The New Jersey Supreme Court stated in part:

“In our view, the analysis for ‘hospital purposes’ must take into consideration the many medical pursuits permitted to the ‘modern’ hospital in New Jersey. A hospital can no longer be restrictively equated with a nineteenth, or even twentieth, century vision of a monolithic building, in which is offered continuous inpatient care or emergency treatment, twenty-four hours per day, to the sick, disabled, and infirm. Licensing authorities have allowed hospital activities to evolve as inpatient stays have diminished. Today, treatment often is delivered on an outpatient basis at a hospital’s main facility, as well as at off-site facilities, backed up by the promise of ready inpatient care from the general, acute-care hospital when necessary. Thus, a fair definition of core “hospital purposes” must acknowledge the variety of activities that a modern hospital can be expected to perform for patients, be they inpatients or outpatients. That said, a hospital’s expansive view of its mission does not necessarily equate with ‘hospital purposes’ in the tax exemption analysis.”

Ultimately, the Supreme Court affirmed the majority of the Tax Court’s and Appellate Division’s holdings, which affirmed the denial of the Hospital’s tax exemption application, and remanded the case back to the Tax Court for further fact-finding on one narrow issue. (The New Jersey Supreme Court remanded the case to the Tax Court for further fact-finding on the sole and precise issue as to whether the PT Service on the second floor of the hospital should be tax exempt.)

The full text of the New Jersey Supreme Court’s opinion may be found HERE.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

According to the Tax Foundation: “New Jersey taxpayers bear the heaviest state-local tax burden in 2008” and paid on average 11.8% of their income in state and local taxes. New York was a close second behind New Jersey with a 11.7% burden. Alaska had the lightest burden, with a mere 6.6% burden. The Tax Foundation’s full article may be found HERE.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

The New Jersey Appellate Division decided Rosen v. Plainsboro Township yesterday. In that case, the Plaintiffs argued that Plainsboro Township’s 2006 reassessment of their condominium units should be nullified because no compliance plan was submitted or approved. The Plaintiffs challenged the application of the remediation exception under the applicable regulation, N.J.A.C. 18:12A-1.14, which provides in pertinent part:

(i) Assessment maintenance: An assessor proposing to revise and update assessments because he or she has reason to believe that property comprising a part of a taxing district has been assessed at a value lower or higher than is consistent with the purpose of securing uniform taxable valuation of property according to law for the purpose of taxation, or is not in substantial compliance with the law, and that the interests of the public will be promoted by reassessment of such property, shall make a reassessment of the property in the taxing district not in substantial compliance….

*2 ….

3. The following are the criteria to be considered by the county board and Division of Taxation in determining whether to approve a compliance plan.

….

(viii) Assessed value changes due to clerical, typographical, transpositional, physical descriptive or mathematical errors, added assessments, omitted assessments, omitted added assessments, exemptions, demolitions, governmentally imposed restrictions, planning board, and/or zoning board of adjustment approvals, approved revaluations, site contamination, removal of contaminated soil and property remediation; and storm, cyclone, tornado, earthquake, fire, flood, hurricane, vandalism, or other casualty, qualified farmland, subdivisions, mergers and changes resulting from appeals or settlement agreements, do not require the filing of a compliance plan.

The Plaintiffs argued that “property remediation” in section (i)(3)(viii) should be read in conjunction with the preceding language “soil contamination” to except from the compliance plan requirement only property remediation undertaken in connection with contaminated soil, and should not include remediation that they contend amounts to “a concentrated catching-up on deferred maintenance.”

The Appellate Division agreed with the Judge Menyuk, judge of the Tax Court of New Jersey, who found that the remedial work was not simply deferred maintenance but effected physical changes at the conclusion of the remedial work that increased the value of the condominium units from the prior assessment, which reflected only partial improvements to the properties while they were in a state of ongoing remediation. Consequently, the Appellate Division affirmed that the substantial remediation of the subject properties constituted an exception to the requirement of a compliance plan stated in N.J.S.A. 54:4-23.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

According to today’s DailyRecord, “Assembly Republicans denounced new affordable housing regulations that took effect this summer as ‘devastating’ to New Jersey and vowed Tuesday to focus most of their legislative efforts this fall on revising them.” This effort is based on the realization that the new rules will lead, as some believe, to higher property taxes, overdevelopment and less open space. In part, the Republicans are looking to reduce the number of affordable houses required to be built each year from 115,000 to some more reasonable level. One idea to accomplish this is by using New Jersey’s plethora of foreclosed homes to solve the state’s needs for affordable housing. Please click the words Property Tax to read the DailyRecord’s full article.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

Ikabob asked:


I live in CA and my wife lives in NJ. We have a joint account with a CA credit union. Now CA only taxes the interest of CA residents. Since my wife’s non-CA income also contributes to this interest, how should I split it for tax purposes?

The Tax Court of New Jersey recently issued a published opinion, Thirty Mazel et al v. City of East Orange, in which it reconciled the Appellate Division opinion Alfred Conhagen, Inc. v. Borough of South Plainfield, 16 N.J. Tax 470 (1997), with the recent Appellate Division opinion H.J. Bailey Co. v. Township of Neptune, 399 N.J. Super 381 (App. Div. 2008).

Both of these Appellate Division opinions concerned N.J.S.A. 54:4-34, which is commonly known as “Chapter 91,” and the application of this statute’s sanction limiting a taxpayer’s right to appeal a tax assessment for failure to respond to a tax assessor’s inquiry for income and expense information.

Previously, in Conhagen, the Appellate Division held that Chapter 91′s appeal-preclusion provision applied when a taxpayer failed to respond to an assessor’s request for income and expense information, even though the subject property was not producing income at the time of the request.

Last year, however, the Appellate Division in H.J. Bailey, held that non-income-producing property is not subject to Chapter 91′s appeal limitation provision, even if the assessor’s request for income and expense information pursuant to the statute went unanswered by the taxpayer.

At issue in the recently published Tax Court case Thirty Mazel, was a property owner who did not respond to a tax assessor’s request for income and expense information who owned several apartment buildings that were formerly income-producing, but during the tax year at issue received no income, as the properties were undergoing substantial renovations.

In the published opinion, the Tax Court stated:

The gap in rent collection was occasioned not by a change in the use of the property or by owner occupancy, but because the living units had been vacated while a major renovation, presumably to enhance the future earning potential of the buildings, was undertaken. The court finds that plaintiffs never intended to abandon the income-producing nature of the properties and instead committed resources to enhancing the revenue generating potential of the properties.

As a result of the above, the Tax Court reasoned that the property owner who owned the apartments was barred by Chapter 91 from filing a tax appeal.

This reasoning in Thirty Mazel underscores the importance of responding to a tax assessor’s request for income and expense information, for even if a property does not produce any income during a relevant year, a tax appeal on such property may be barred by Chapter 91 if the tax assessor’s request is not timely answered.

* LEGAL DISCLAIMER
This Blog/Web Site is made available for educational purposes only general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher.

* Both www.irs.gov and www.state.nj.us/treasury/taxation are “open” 24 hours a day 7 days a week.

* Both allow you to review and download current and past year tax forms, instructions and publications . The NJ site has NJ-1040s going back to 1992 and the IRS site has the basic 1040 and some Schedules as far back as 1980. Click here for IRS and here for NJ.

* The NJ site allows you to file your current NJ-1040 online for free – in most situations via NJWebFile. This is what I use to satisfy my “electronic filing” requirement as a preparer of state resident tax returns. Unfortunately taxpayers with net profits, or loss, from business (federal Schedule C filers), distributive share of partnership income, or loss, and/or pro rata share of S corporation income (those who receive K-1s) cannot use NJWebFile. Click here for a complete list of who cannot use this free online system to file a 2008 NJ-1040.

While the IRS has a “Free File” program for lower-income taxpayers, these programs, including the new Fill In Forms option, are all run by outside vendors. You cannot file your federal income tax return free online directly through the IRS yet.

* Both sites allow you to make tax payments electronically. You can authorize an electronic funds withdrawal, use a credit or debit card or, with federal taxes, enroll in the U.S. Treasury’s Electronic Federal Tax Payment System.

* The IRS site lets you check the status of your tax refund. Whether you opted for direct deposit of your federal refund or are expecting a check, you can check the status of your refund through “Where’s my Refund?”. You can also check the amount of your 2008 economic “stimulus” rebate check, information you will need when preparing your 2008 federal income tax return.

While there is currently no online inquiry system for NJ state income tax refunds (you must check the status of a NJ state income tax refund via telephone) you can check on the amount of your NJ Homestead Rebate for 2005 through 2007 (the 2007 rebate was issued in 2008). Homeowners who itemize will need this information for the federal Form 1040.

* The IRS site has a “Withholding Calculator” to help you determine the right amount of withholding on your W-4. It also has a “Sales Tax Deduction Calculator” to help determine the amount you can claim as a deduction on Schedule A if you opt to deduct state and local sales tax instead of state and local income tax.

* The IRS site also lets you search Publication 78, Cumulative List of Organizations, to find out if an organization is exempt from federal taxation and, if so, how much of your contributions to that organization are tax deductible.

* Both sites provide lots of information on applicable tax law, dealing with the agencies, and how to do “stuff”. NJ has an excellent “How Do I” page.

* And both sites are excellently indexed by category of taxpayer. Both index by INDIVIDUALS and BUSINESS and the IRS site also has sections for CHARITIES AND NON-PROFITS, GOVERNMENT ENTITIES, AND RETIREMENT PLANS COMMUNITY. Both sites have a special section for TAX PROFESSIONALS.

New Jersey also has an excellent portal for businesses – the NJ Business Gateway Registry Services. While NJ is one of the most expensive states in which to have a business, and consistently lands on the bottom of the list of “business-friendly” states (as it nickels and dimes its small businesses almost to death) – the state does make it extremely easy to form, register and make changes to a business (so you can be nickeled and dimed), to make state tax and other payments and file required reports, and to dissolve a business (when you have had enough with NJ rules, regulations, taxes and fees and decide to give up).

So check out the IRS and NJ Division of Taxation websites and take full advantage of all that they have to offer.

TTFN

Olivia’s Mommy 3 asked:


During a portion of 2005 and 2006 I purchased a total of 18 cartons of cigarettes online for a discounted rate. These were not sold, they were for my own personal use, also for my boyfriend.

I received a bill today in the mail for almost $500 for sales and excise tax. The sales tax total is $60.00, but the excise tax is $420.00. What exactly is the excise tax and how is the state of NJ able to charge me the excise tax and is there anything I can do to reduce these charges?

I just wanted to get some answers before I called and paid anything.