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Lucent Technologies, Inc. v. Berkeley Heights Township

24 N.J. Tax 297 (2008)

TAXATION; ASSESSMENTS — Where a property has not undergone physical change, economic conditions have not changed, and legal restrictions governing the property’s use has not changed, it is perfectly reasonable for a tax assessor to rely on past assessors’ work and upon information provided by a municipal appraiser when determining a given year’s assessed value for the property.

Municipal tax assessments were made on a commercial property for two consecutive tax years. Two assessors were involved in the assessments. The first assessor did not inspect the subject property in conducting her review. Rather, she focused on the total value of the property, and discussed with the municipal appraisal expert the property’s value and a Chapter 123 ratio decline from three years prior. In reliance on the appraiser’s recommendations, she reduced the assessment on the property. A second assessor was retained to assess the property in the following tax year. He likewise did not inspect the property, nor did he make any independent effort to value the land or improvements or to determine the overall value of the property. In setting his assessment, he consulted the prior assessor, the municipal appraisal expert, and reviewed a revaluation assessment made eight years earlier. He believed that measurement of the subject buildings was not necessary, as he also relied upon sketches made of the buildings and notes of an assessor from four years earlier. He also was aware of the pricing of office and warehouse buildings and concluded the subject buildings, which contained both, were within those values.

The commercial owner appealed the local property tax assessments of its property for these two consecutive years, but did not respond properly to a request for information served by the municipality tax assessor and so waived certain rights of appeal. The owner subsequently requested a reasonableness hearing for which the Tax Court took testimony and received deposition and exhibit evidence. The owner claimed that the information that the assessors relied upon was faulty and did not provide a reasonable basis for determining value of the property, and that the methodology employed by the assessors was flawed and unreasonable.

The Tax Court stated that a taxpayer must effectively prove a tax assessor acted arbitrarily and capriciously in setting assessments by using a patently defective method. The Court said that a presumption of validity would remain even if the municipality utilized a flawed valuation methodology, so long as the quantum of the assessment is not so far removed from the true value of the property. Then, it concluded that the municipal assessors acted reasonably for each of the tax years in issue and dismissed the appeals, thereby affirming the assessments on the property for the two tax years. In doing so, the Tax Court found that the assessing practice performed was reasonable, as the property had not undergone a physical change, economic conditions had not changed during the two tax years, and the legal restrictions governing the property’s use had not changed. Further, the Court noted that the property had previously undergone a reevaluation assessment. The Court found it perfectly reasonable for assessors to rely upon past assessors’ work and upon information provided by a municipal appraiser under such circumstances where the assessors notably focused on the total value of the subject property.

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