Howell Township v. Monmouth County Board of Taxation

18 N.J. Tax 149 (1999)
  • Opinion Date: March 19, 1999

TAXATION; SITE IMPROVEMENTS—There is no statutory basis for separately assessing residential development site improvements such as utilities, sidewalks, paving, and drainage. Their value is subsumed in the value of the adjacent subdivided lots.

A municipality sought to tax utilities, including water, sanitary and storm sewers, electric and gas; and improvements such as curbs, sidewalks, and a base coat of asphalt paving on the streets; and drainage located in a right of way in front of individual lots, all constructed in connection with a residential development. According to the municipality, the list of improvements constituted “structures” which had been “erected” and “completed” during the requisite time period under the added assessment statutes. According to the Court, it was important that the Legislature did not use the term “improvement” in the added assessment statute because there is a clear distinction between the terms “improvement” and “structure.” “Improvement” refers to the general nature of change to a property whereas “structure,” while it may be an improvement, carries a more specific meaning, whether as defined by statute or by common usage. In accordance with this understanding, the Court found the “mere fact that the subject utility lines and roadway may improve and add value to the land is irrelevant as to whether an added assessment should be imposed.” Any increase in value can be reflected in the land assessment of the adjacent subdivided lots. Although the Legislature did not define the term “structure” in the added assessment statutes, it is defined in another section of the taxing statute. There, it means “any assemblage of building or construction materials fixed in place for the primary purpose of supporting, sheltering, containing, enclosing or housing persons or property.” The municipality conceded that the site improvements did not shelter, contain or enclose persons or property. Instead, it argued that the improvements, as well as the roads and curbs, “support both persons and property in the abstract sense, in that they are components in making a property usable in a commercial development.” The Legislature did not define the term “support” in the statute, and the Court declined to agree with the municipality that the definition of the word “support” should be viewed in a way other than its generally accepted usage. The Court found no indication in the statute that the Legislature contemplated the word “support” to be used other than according to its ordinary meaning. Therefore, the term “structure” must be limited to property similar in nature to a “building.” Moreover, the Legislature’s deliberate choice of the term “structure” in the added assessment statutes undermined the municipality’s broad policy argument and acknowledged an intent not to tax all improvements for added assessment purposes. The Court looked to the common practice of assessors as added support for its position, finding that utilities and improvements of this nature were not regularly treated as separately assessable property. Accordingly, the Court held that there was no statutory basis for the municipality’s assessor to place an added assessment on these site improvement.