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Moran v. Township of Montgomery

A-4724-08T2 (N.J. Super. App. Div. 2010) (Unpublished)

TAXATION; CORRECTION OF ERRORS STATUTE — Even though there may be an error in a tax assessment, where the correction is not self-evident, requiring an assessor’s exercise of judgment, the error is not within the category of indisputable mistakes that can be corrected under the Correction of Errors statute.

By reason of a conservation easement, a property owner’s land assessment before 2005 reflected a twenty percent reduction. The municipality’s records showed that at the time of a municipal re-evaluation in 1999, no conservation easements were considered for the purpose of reducing land values. The records also showed that, in 2005, all land assessments were increased substantially, including that of the subject property. The property owner asserted that she was entitled to relief for the tax years 2005 through 2008 to “correct” the assessment applied in those years so as to reflect a twenty percent conservation easement discount on the land portion of the assessment. The local tax assessor, although not willing to apply such a discount to the assessment prior to 2008, agreed to apply a 12-1/2% adjustment for 2009 and thereafter. The lower court supported the municipality’s position and denied the property owner relief under the “Correction of Errors” statute, N.J.S.A. 54:51A-7. In doing so, the lower court concluded: “[t]here is no black letter rule or any scientific evidence to show that 20 percent is a fixed, definite and certain amount, other than the exercise of a given assessor for a given year relating to a given property. ... [H]aving found the error, it would have been necessary for the assessor to exercise her judgment as to how much that conservation easement would reduce [the land value of the property], that is clearly an area of judgment and not one of correctable error. ... Thus, although, there was an error in the assessment, the error was not easily correctable and the benefit of an extended statute of limitations provided for by the [C]orrection of [E]rrors statute cannot be availed of by the [taxpayer] in this case.”

On appeal, the taxpayer argued that the error was a “simple failure to carry forward a credit that had already been determined as appropriate” and was thus a mistake of the “mechanical error” variety correctable under the statute. The Appellate Division disagreed with the taxpayer, pointing out that “there was no typographical error, transposition in numbers, or mechanical error regarding the land assessment of her property for the tax years 2005 through 2008. ... The challenged mistake in assessment involve[d] an assessor’s exercise of judgment and its correction is not self-evident; therefore, it [was] not within the category of ‘indisputable’ mistakes that can be corrected under the Correction of Errors statute.”

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