The NJ Tax Blog

The New Jersey Department of Taxation released the Winter 2008 Quarterly Newsletter this morning. This publication provides a general overview of recent legislation, case law, and administrative policies pertaining to property tax appeals, gross income taxes, sales taxes and the corporate business tax.

Of particular note to readers of this blog, are the changes that were enacted on December 18, 2008 to the Property Tax Reimbursement Program (“PTRB”). The recent change to the PTRB raises the maximum income for eligibility for the program t0 $70,000 or less for the 2008 tax year. Previously, the maximum income was $60,000.

Also of note are two specific instructions for the Homestead Rebate Program.

According to the Newsletter:

Tenants who meet the eligibility requirements for the Homestead Rebate Program should "use the application in the New Jersey income tax booklet, Form TR-1040, to apply for the homestead rebate for tenants."

On the other hand, Homeowners who meet the eligibility requirements for the Homestead Rebate Program should "not use the application in the income tax booklet. Applications for the homeowner rebate are expected to be mailed at the end of April, and homeowners will apply either online or by phone."

The full Newsletter may be accessed by clicking the words Property Tax Appeals, NJ.

Reversing the Tax Court of New Jersey, the Appellate Division on Wednesday adopted the New Jersey Industrial Site Recovery Act (“ISRA”) as the cornerstone in determining whether a tax assessor should value a property by taking into account environmental cleanup costs. As stated by the Appellate Division in Pan Chemical Corp. v. Hawthorne Borough: “The degree to which a property is ‘in use’ or ‘closed down’ cannot be left to subjective standards resulting in inconsistent determinations. ISRA provides a rational, objective standard by which one can determine whether property is in use for tax purposes, as well as for determining whether the obligation to remediate has been triggered.”

The Appellate Division stated that the reason that the ISRA standard should be adopted is due to the fear that a taxpayer, such as the plaintiff here, will keep a bare minimum of continued operations and employees working at a property in order to avoid a “closed operations” status and, thus, avoid triggering the cleanup mandates of ISRA. According to the Appellate Division: “It therefore appears that [the plaintiff] would have it both ways. It wanted the property to be deemed ‘in use’ during the years on appeal for the sole purpose of avoiding the costly cleanup mandated by ISRA. Now, [the plaintiff] wants the property to be deemed ‘not in use’ over the same period of time in order to claim a reduced tax liability.”

However, isn’t the whole point of allowing a reserve deduction to allow a consistent annual deduction for large expenses that a property will have to undergo at some unknown point in the future?

To read the full opinion please click the words New Jersey Property Tax Appeals.