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John Trebour Trustees v. Randolph Township

2009 WL 3430302 (N.J. Tax 2009)

TAXATION — A taxpayer is required to pay all outstanding real estate taxes with respect to the subject property before it can validly file a tax appeal, but is not required to pay real estate taxes on all properties in the municipality owned by the same taxpayer.

A taxpayer filed tax appeals to reduce the property tax assessments for two of its properties. At the time of filing, the taxpayer had not paid taxes for one of those properties for the third and fourth calendar quarter of one tax year or for the first quarter of the following tax year. The municipality moved to dismiss the tax appeals for both properties based on the taxpayer’s failure to pay taxes on that one property. The taxpayer voluntarily withdrew its tax appeal on the property subject to the past due taxes and filed an objection to the municipality’s motion to dismiss the tax appeal for the other property. The municipality claimed that N.J.S.A. 54:3-27 requires a taxpayer filing a tax appeal to pay all real estate taxes owed by the taxpayer for its properties located within the same municipality, and not just the taxes due on the property subject to the appeal. The municipality’s argument was based on the following language within the statute, “A taxpayer who shall file an appeal from an assessment against him shall pay ... .” The municipality argued that the use of the words “against him” referred to a taxpayer specifically, and not against the property subject to a tax appeal. Therefore, the municipality argued that the taxpayer’s appeal should be dismissed since it still owed taxes on its other property.

In response, the taxpayer claimed that the statute did not refer to an individual taxpayer, but rather to the very property subject to the tax appeal. It claimed that the words “assessed” and “assessment” within the statute did not refer to an individual taxpayer, rather, to an act of valuation which is directed toward the property. The Tax Court found both readings to be plausible, and therefore found it necessary to interpret the statute in a manner that would carry out the legislative intent. It noted that all statutes dealing with the taxation of real property use the term “assessed” when dealing with a specific property. It also noted real property taxes are a lien on the real estate and not a personal obligation of the property owner. Therefore, it found that the municipality’s interpretation contrary to the principle that taxes are a lien on real property and not the personal obligation of its owner. Further, the Tax Court noted that there was no published case where the Tax Court had dismissed a tax appeal based on a taxpayer’s failure to pay taxes on a parcel of real property not subject to the tax appeal. It also rejected the municipality’s argument that if its motion to dismiss was denied, the taxpayer should not be able to withdraw its tax appeal as to the property with past due taxes. The Tax Court held that a taxpayer has the right to withdraw a complaint at any time prior to the close of proofs. Therefore, the taxpayer was entitled to withdraw its tax appeal as to the property with past due taxes.

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