Archive for the ‘Tax Appeals’ Category

Guest post by Nicholas Pellitta and Andrew Linden

Pursuant to N.J.S.A. 54:4-34, municipalities may issue to owners of real property what is known as a “Chapter 91” request. This request seeks information pertaining to the taxpayer’s income and expenses for the real property so that the information can be used to assist the tax assessor to determine the following year’s tax assessment and whether the property is “income producing” (meaning generally that a fee is paid to the owner for the continuous and exclusive use of a specific portion of the land or buildings, i.e., rental income). All property owners receiving such a request are required to respond within 45 days.

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Guest post by Nicholas Pellitta

NJ Biz reports: A state law enacted this summer could have widespread effects on owners of New Jersey industrial properties.  The law diverts property tax refunds for sites under environmental remediation that are vacant or “underutilized” to the state Department of Environmental Protection to pay for the remediation, leaving property owners empty-handed until the cost for remediation has been paid.

Law has industrial site owners on alert

On April 10, the New Jersey Economic Development Authority board approved a total of $110 million in tax credits under the new Grow New Jersey Assistance Program, signed into law in January with support from NAIOPNJ, which targets businesses that are both investing money in the state and adding or retaining 100 jobs. “Here we are three months later, and we have four great projects,” said EDA CEO Caren Franzini, noting the recipients are committed to remaining in the state for 15 years, five years more than the time period in which they receive the tax credits. Like other large incentive programs, companies only receive the tax credits once they have opened their facilities, she said.

The EDA board also agreed to issue bonds on behalf of a company, to be selected by the Port Authority of New York and New Jersey, to build a replacement to the Goethals Bridge.  At an estimated cost of $1.56 billion. The approval was needed as part of the authority’s application to the U.S. Department of Transportation for funding for the project.

In Fifth Roc Jersey Associates, L.L.C. v. Town of Morristown, Fifth Roc, the owner of the Morristown Hyatt, represented by my colleagues Carl Weisenfeld and Nick Pellitta, successfully challenged an $8 million “added assessment” by the Town of Morristown on its property for 2009,  under the “Freeze Act,” N.J.S.A. 54:51A-8, which provides:

Where a judgment not subject to further appeal has been rendered by the Tax Court involving real property, the judgment shall be conclusive and binding upon the municipal assessor and the taxing district, parties to the proceeding, for the assessment year and for the two assessment years succeeding the assessment year covered by the final judgment, except as to changes in the value of the property occurring after the assessment date.

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It’s that time of year, again.  Tax Time.  Could you be saving money?  Should you file a real estate tax appeal?  Don’t know.  Read on.

One obvious reason for filing a real estate tax appeal is to obtain a lower assessment on your real property and thereby save significant tax dollars. An equally important reason to keep taxes low is to help maintain the value of the property making it more saleable in the event that the tax appeal is successful.

It would be wise to review the assessment on the property each and every year to see whether a tax appeal is warranted. The problem is that most owners of industrial, commercial and apartment properties, as well as tenants under net leases, are not aware that they may be prime candidates for successful tax appeals even after looking at their new assessment.

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Many people are in the dark when it comes to tax sales, including many lawyers.  Because municipal governments depend upon real estate taxes and other related assessments as their primary source of revenue, when those taxes remain unpaid for a period of time, the municipality is granted a continuous lien on the land for the delinquent amount, as well as for all subsequent taxes, interest, penalties, and costs of collection.  The Tax Sale Law simply provides a stream of revenue for the municipality by encouraging the purchase of tax certificates on tax-dormant properties. New Jersey requires all 566 municipalities to hold at least one tax sale per year provided the municipality has delinquent property taxes and/or municipal charges.

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Guest Blogger: Nick Pellitta

One obvious reason for filing a real estate tax appeal is to obtain a lower assessment on your real property and thereby save significant tax dollars.  An equally important reason to keep taxes low is to help maintain the value of the property making it more saleable in the event that the tax appeal is successful. 

It would be wise to review the assessment on the property each and every year to see whether a tax appeal is warranted.  The problem is that most owners of industrial, commercial and apartment properties, as well as tenants under net leases, are not aware that they may be prime candidates for successful tax appeals even after looking at their new assessment. 

Read the rest of this entry »