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Greate Bay Hotel and Casino v. City of Atlantic City

A-6609-01T2 (N.J. Super. App. Div. 2003) (Unpublished)

TAXATION—A county tax board has the discretion to transfer a tax appeal to the Tax Court.

A casino had unresolved tax appeals for assessment years 1996 through 2001 pending in the Tax Court. Some had been brought directly to the Tax Court and others were first brought to the County Board of Taxation. It then filed an appeal for 2002 directly to the County Board of Taxation even though it could have filed directly with the Tax Court because the assessment exceeded $750,000. This presented a question to the Appellate Division as to whether a “County Board of Taxation was obliged by its enabling statute to conduct a full evidential hearing on value or if it had the discretion, over the taxpayer’s objection and after according it a hearing on that question, to dismiss the appeal without prejudice for the purpose of effecting what is tantamount to a transfer of the appeal to the Tax Court for potential consolidation with the pending prior year appeals.” The Court held that discretion was available and appropriately exercised in this case.

Following the setting of the initial hearing date, the municipality, by letter to the County Board, requested that the matter be transferred because of the “municipal resources which would have to be expended for what would surely be only an interim and inconclusive step in the appeal process.” In effect, it asked the County Board to affirm the assessments without prejudice, the equivalent of a dismissal without prejudice. The County Board treated the municipality’s letter as a contested motion and conducted a hearing. The County Board “adopted a resolution, which, without a statement of reasons, concluded that ‘these appeals shall be given a hearing before the said Atlantic County Board of Taxation.’” Before hearing the matter, the County Board chose to reconsider its decision and instructed the parties to file briefs addressing the issues. It then reversed itself and adopted a resolution dismissing the appeals without prejudice “so that the petitioner [could] file said appeals with the Tax Court.” The Tax Court conducted a preliminary telephone conference on the taxpayer’s appeal of the County Board decision. It ruled against the taxpayer, and in rendering its decision noted the “impracticality and the wastefulness of an evidentiary valuation hearing of this appeal by the County Board, which is not reasonably equipped, by reason, at least in part, of its time constraints and limited discovery opportunities, to conduct the same fully prepared, exhaustive, and formal trial accorded by the Tax Court.”

The Appellate Division looked at the enabling statute for the County Board of Taxation. It also looked at an earlier Tax Court case between the same parties and decided to “rely in large measure on the cogent analysis” in that opinion which addressed “the respective functions and jurisdictions of the county board and the Tax Court.” In that case, the deciding judge “rejected the taxpayer’s claim that it was entitled to an evidentiary hearing by the County Board pursuant to [the relevant statute], particularly because it had filed first.” That opinion held that county boards were “not well constructed for the review of large and complicated assessments.” In fact, the lower court treated the very same taxpayer’s filing while prior years were pending in the Tax Court as “gamemanship” in its “invoking the jurisdiction of a body not ideally suited to deal with cases as complex as the subject cases.”

The Appellate Division recognized that the legislative scheme gave a taxpayer the option of choosing its forum. Nonetheless, it held that the right to pursue the county board option was not absolute. Essentially, “when the Tax Court was first created, [a New Jersey statute] accorded any party to an appeal pending in the county board of assessment of $750,000 or more, the right to have it transferred to the Tax Court.” Although those rules were not strictly implicated here, the Court believed that had the municipality “been prescient enough to anticipate ‘[the taxpayer’s] last-minute filing with the County Board and its insistence on an evidentiary evaluation hearing in that forum,’” it could have defeated the County Board’s jurisdiction by the simple expedient of filing its own 2002 tax appeal in the Tax Court. Finally, the Tax Court stated, “[t]hese considerations impel us to conclude that the statutory complex, taken as a whole, accords the county board, over the objection of a party, the discretion to dismiss without prejudice as a technique for deferring the evidentiary evaluation hearing to the Tax Court.”

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