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Liapakis v. State of New Jersey, Department of the Treasury, Division of Taxation

363 N.J. Super. 96, 831 A.2d 120 (App. Div. 2003)

TAXATION; APPEALS—The ninety day period within which a taxpayer may appeal a gross income tax assessment to the Tax Court begins on the day the taxpayer receives the determination letter by certified mail, not when it is sent.

The Director of the Division of Taxation (Director) mailed a Gross Income Tax assessment determination letter to a taxpayer. It was sent by certified mail and received three days after it was sent. The taxpayer filed an appeal of the judgment 91 days after the determination was mailed and 88 days after it was received. The Director asked the Court to dismiss the complaint as untimely, and the Tax Court agreed. On appeal, the Appellate Division needed to determine “whether it is the date the Director mailed the determination by certified mail, or the date when the taxpayer received and signed for the certified mail, that begins the calculation of the ninety-day [limitations] period.” According to the Court, if the Court Rules adopted by the New Jersey Supreme Court do not apply in this case, then the date of mailing begins the ninety-day limitation period. Under Court Rule 8:4-2(a), “[t]he time period shall be calculated from the date of service of the decision or notice of the action taken.” That period can be extended by three days if the service of a notice or papers is made by ordinary mail. Also under the Court Rules, certified mail is deemed complete upon mailing of ordinary mail, but “[i]f no ordinary mailing is made, service shall be deemed complete upon the date of acceptance of the certified or registered mail.” This means that if Court Rules apply to determine a deadline for filing a complaint with respect to an assessment determination by the Director, this particular taxpayer’s filing was timely.

Under the Gross Income Tax Law, a taxpayer may appeal a Director’s decision within ninety days “in accordance with the provision of the State Tax Uniform Procedure Law (‘Procedure Law’).” Under the Procedure Law, “service in all matters with respect to [a] complaint and practice in the Tax Court” is to be governed by the rules of the court. With that as background, the taxpayer argued that the ninety day period for filing an appeal with the Tax Court only began to run when he received the certified mail termination letter. The Director argued that New Jersey tax statutes should prevail, especially the portion that reads “[t]he time for appeal to the Tax Court ... shall commence from the date of the final determination by the director.” With that in mind, the Director asserted that the key date was the date of mailing because another section of the Procedure Law states that “for the purpose of forming a complaint, the decision of the director shall be deemed final on the date the notice is sent by mail to the taxpayer.”

Faced with the competing arguments, the Appellate Division reviewed prior case law and focused on a case that interpreted the New Jersey Constitution “which grants authority and places responsibility in the Court to ‘make rules governing the administration of all courts in the State and, subject to law, the practice and procedure in all such courts.’” In that earlier case, the Court “rejected the argument that the phrase ‘subject to law’ meant ‘subject to legislation,’ because that would have allowed the Legislature to interfere with and even supercede the ongoing rule-making power granted to the Supreme Court.” Therefore, based on prior case law and with the understanding that courts set their own rules as to limitation periods, the Appellate Division held for the taxpayer and ruled that the time for appeal ran from the date that the taxpayer received the Director’s notice by certified mail.


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