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Township of Dover v. Scuorzo

392 N.J. Super. 466, 921 A.2d 450 (App. Div. 2007)

TAXATION; ACT OF DUTY — The real estate tax deduction given to veterans who were in “active service during times of war,” does not inure to the benefit of those veterans who were only in “active service for training.”

Two former military personnel, an enlistee in the United States Air Force Reserve and an enlistee in the Army National Guard, were both ordered to report for training during wartime. Both men were honorably discharged without having been placed on active duty and later became homeowners. The veteran of the National Guard had suffered injuries during training and later became deaf as a result of the injuries. The air force veteran was initially allowed by the municipality in which he resided to receive a deduction on his real estate taxes as part of a state constitutional provision that allows such deductions for veterans who were in “active service during times of war.” Following an audit by the state director of the taxation division, it was found that the deductions were not allowable because such deductions were not granted to service personnel who were only activated for training and the veteran had to reimburse the municipality for the deductions. The National Guard veteran was denied the tax deduction by the municipality in which he resided because he also had only been activated for training. His hearing loss would have otherwise qualified him for an exemption from having to pay property taxes.

Both veterans appealed to their respective county boards of taxation and were both granted the deductions. Both of these matters were brought before the tax court and in separate decisions, the tax court found that “active service in time of war” included “active service for training.” The tax court decisions were appealed and the matters were consolidated by the Appellate Division. The Court noted that the constitutional provision, as well as the subsequent statutory language, allowed the deductions and exemptions for veterans who were in “active service in time of war.” The Court also noted, by examining previous administrative decisions, that veterans who served in the National Guard or in the military reserves were only allowed this form of tax relief if they had been placed on active military duty during times of war, but not if they were only activated for training during times of war.

The Court pointed out that the director of taxation was vested by the legislature with the responsibility for administering tax exemptions including those allowed for veterans who served during wartime. Also noted by the Court was the deference given to administrative agencies’ interpretations of statutory law as long as such decisions are not unreasonable. The Court additionally pointed out that long-standing administrative interpretations, that are not hindered by the legislature, indicate conformity with legislative intent. Statutes, other than those dealing with tax exemptions, and related court decisions that define service during wartime and service for training, were found by the Court to consistently define service for training by reserves and national Guard personnel as not being included as part of service during wartime. The Court found that active service for training by reserves and National Guard personnel was not considered to be active service in time of war and reversed the tax court’s decisions.


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