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Mount Laurel Township v. Burlington County Board of Taxation

010699-2008 (N.J. Tax 2009)

TAXATION; ASSESSMENTS — Not only must a county board consider all twelve criteria set forth in the New Jersey Administrative Code before deciding whether a municipality must conduct a municipality-wide revaluation property assessments, but the board’s hearing record must demonstrate that those factors have been considered.

A municipality challenged its county tax board’s order directing it to implement a municipal wide revaluation. The tax board’s order was approved by the Director of the Division of Taxation. The New Jersey Administrative Code, N.J.A.C. 18:12A-1.14(b), lists twelve criteria that a county tax board must consider in deciding whether a municipality must conduct a municipality-wide revaluation of property assessments. They include, among other things, determinations that the ratio of assessed value to true value is 85% or lower and that the coefficient of deviation, the average deviation from the average assessment sales ratios, is greater than 15%. There are three types of coefficients of deviation. One is a general coefficient of deviation, which calculates the average deviation from the average assessment sales ratios for all properties within the taxing district regardless of property classification; a stratified coefficient of deviation, which calculates the average deviation of each property class from the average assessment sales ratio for that class; and, a segmented coefficient of deviation, which calculates the average deviation of assessment sale ratios of each property class from the average assessment ratio for all property classes. In this case, the county tax board found that the municipality’s ratio of assessed value to true value was 50.75%, and the general coefficient of deviation was 8.63%.

The county tax board concluded that the municipality’s statistical pattern reflected an assessment pattern that lacked uniformity and resulted in an unequal distribution of the tax burden within the municipality. Therefore, it ordered a revaluation. The municipality argued that the tax board was acting arbitrarily, capriciously, and unreasonably because the tax board order only listed two of the twelve factors that had to be considered in ordering a revaluation without indicating whether any other factors were considered. Furthermore, one of the factors used by the tax board, the general coefficient of deviation, did not meet the standard since the deviation was less than 15%. The county tax board argued that the other factors were considered in determining that a municipal wide revaluation was needed. The county’s tax administrator testified that the form of order containing the two factors was the tax board’s standard form, but that the tax board actually employed a statistical summary sheet prepared by her office using the director’s sale ratio and all three coefficients of deviation. She also testified the tax board had considered other factors, including the fact that the municipality had not conducted a reassessment for 13 years or a revaluation for 20 years.

Although the county tax administrator testified that she provided a statistical sheet for the tax board to consider that included more of the required factors, she was not a member of the tax board and therefore could not testify as to which additional factors the board actually had considered before ordering a revaluation. For those reasons, the Tax Court could only look to the findings in the tax board’s order which only had listed two factors. Of those two factors, the general coefficient of deviation did not meet the threshold test, and the ratio of assessed value to true value, by itself, was not sufficient to require a municipal wide revaluation. For those reasons, the Tax Court remanded the matter to the county tax board to make a better record of its factual and legal conclusions in ordering the revalution.


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