The NJ Tax Blog

A Letter from New Jersey Senator Robert Singer (R-30) and New Jersey Senate Republican Leader Tom Kean (R-21) was recently sent to New Jersey Governor Jon Corzine which urged a state-wide reassessment of homes. At first blush, such a proposal seems to violate the New Jersey Constitution's Uniformity Clause (art. VIII, sec. 1, para. 1(a)), as the proposal would irrationally treat residential and commercial properties differently. Nonetheless, it is a novel concept and one that only underscores the dire financial crisis of the current real estate market.

The full letter follows:

January 16, 2009

The Honorable Jon Corzine
Office of the Governor
PO Box 001
Trenton, NJ 08625

Dear Governor Corzine:

Declines in home values have resulted in a disparity between the market valuations of homes in New Jersey and the valuations at which those homes are assessed for the determination of property taxes.

Some homeowners have appealed their property tax bills based on these lower market values and have successfully had their assessed valuations reduced. While home values in many neighborhoods have fallen uniformly, this piecemeal approach to reassessment has the potential danger of shifting the tax burden to other homeowners who may not know how to appeal their assessments.

A published report in the Herald News on January 12, 2009 stated that property tax appeals in Passaic County rose by 70% last year. During the same period, the report states that appeals in Wanaque rose by nearly 300%. Similar surges in appeals have likely occurred across New Jersey.

These reports clearly demonstrate that hard financial times are forcing people to scrutinize every expense, including property tax bills that are based on outdated valuations. We can be certain that an even larger flood of appeals can be expected in this difficult year. In these extraordinary times, we should investigate a comprehensive approach to reassessing home values statewide.

We have called on the Senate Budget and Appropriations Committee to hold hearings on the possibility of a statewide reassessment of property values. Cooperation by the State Division of Taxation is obviously essential to any review. We certainly hope that your Administration will support this effort to ensure uniformity in property assessments as the state works through our fiscal difficulties.

Sincerely,

Tom Kean
Senate Republican Leader

Robert Singer

Senator, District 30

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.

Residents who reside in three New Jersey Counties pay more in real estate taxes as a percentage of homeowner median income than residents of any other county in the United States. Specifically, residents who reside in Passaic County, N.J. pay on average 8.5% of their income in real estate taxes. Close behind are the residents who reside in Union County, N.J. and Essex County, N.J. who pay on average 8.1% of their income in property taxes.

Given that real estate values have fallen drastically in the last several months, residents who reside within Passaic, Union and Essex counties should give the thought of filing a real estate tax appeal on their property heavy consideration.

The full article posted on Forbes.com may be found by clicking the words Real Estate Tax Appeal Attorney.

New Jersey property taxes were mentioned throughout Governor Corzine’s State of the State Speech yesterday.

One of the first points the governor noted was how, under his administration, an additional 70,000 senior households are now afforded the protections of the Senior Freeze Act.

The governor also noted how he is recommending that municipalities be afforded the option of forgoing pension payments in order to avoid budget cap waivers. According to the governor, allowing municipalities to avoid the pension payments will allow municipalities to avoid painful property tax hikes.

The governor also claimed that he is going to seek to actively enforce the 4% local budget cap, something that over 80% of reporting municipalities did not comply with last year.

Lastly, in concluding the speech, the governor stated: “We must work with county executives, freeholders, mayors, and school boards to make New Jersey more affordable by holding the line on property taxes.”

Despite these statements by the governor, to most property owners throughout New Jersey, little seems to have been accomplished to alleviate the ever-crushing property tax burden.

To read the full text of the governor’s speech, please click the words New Jersey Property Taxes.

A developer building at the Penisula at Bayonne Harbor purchased a tract of land in 2007 for $18.5 million. Despite this, the City of Bayonne is taxing the vacant tract of land as if the property is worth a little over $23 million. As a result, the developer must now pay $568,000 in property taxes instead of $424,000. But that's not all, the tract of land was granted a 30-year tax abatement by Bayonne last March. Unfortunately for the developer, the abatement agreement is structured so that the tax abatement does not begin until the developer gets a certificate of occupancy. Talk about an incentive to get a portion of the development completed.

To read the full article, please click the words Real Estate Tax Appeal Attorney.

"When Barack Obama makes his New Year's resolutions, at the top of his list ought to be the following: 'I will not allow America to become New Jersey.' Think of it as our [New Jersey's] gift to the nation." These are the words spoken in an editorial in today's Wall Street Journal in an article titled "New Jersey is the Perfect Bad Example, Obama should look here to see what high taxes do." As stated by the author, New Jersey, according to the Tax Foundation, has the most hostile business environment in the country. Moreover, as realized by the author, "Over the long run, the only way to have a healthy and growing economy is to do exactly what New Jersey has not: Trust the people with their own money, and create an environment where initiative and enterprise are rewarded rather than penalized. Absent a thorough-going revolution in Trenton, New Jersey may be lost for some time to come. But if Mr. Obama can learn from our bad example and do the opposite, New Jersey's loss might yet be America's gain." I fully agree with the author and can only pray that the New Jersey Legislature will one day realize the wisdom that resonates from the author’s words.

To read the full article by the Wall Street Journal click the words Property Tax.

As a reminder to everyone in New Jersey who recently received a 2007 omitted-added assessment bill and/or a 2008 added assessment bill, the deadline to appeal such assessment is THIS MONDAY, December 1, 2008.

This means that the County Board of Taxation must actually RECEIVE your filed petition contesting the 2007 omitted-added assessment or 2008 added assessment by Monday. Merely mailing your petition by Monday is insufficient. If the County Board does not receive your petition by December 1, 2008, the County Board will almost for certain not hear your appeal and you will be jurisdictionally barred from appealing your assessment to the Tax Court of New Jersey.

If you are unsure whether or not you have a claim, I strongly suggest that you file your appeal now in order to preserve your rights. After you file your petition, you could always investigate your rights further by contacting a Property Tax Attorney who specializes in this area of law.

Timothy A. Boulos, Esq., a fellow real estate tax appeal attorney, died this morning. He was twenty-six years old. Tim graduated from the Widener University School of Law in 2007 and from Rutgers University in 2004. Tim was a close colleague to many in the New Jersey Bar and will be greatly missed.

The Record (www.northjersey.com) reported today that Verizon Wireless plans to stop paying millions of dollars in property taxes to local New Jersey municipalities by 2011. Currently, Verizon is paying these taxes pusuant to a 1940 statute that requires the predominant “telecomunications carrier” in a municipality to pay taxes on personal property. However, due to the fact that several cable companies are now offering telephone services in addition to traditional cable services, Verizon is no longer the dominant “telecomunications carrier” in several New Jersey municipalities. As a result, Verizon is now arguing that it is no longer required to pay property taxes on its personal property. To read the full article that addresses this issue in more detail, please click the words Property Tax.

Due to the faltering economy, Governor Corzine indicated that he may cut New Jersey’s Property Tax Rebate program even further next year. Yesterday, at a news conference after dedicating New Jersey’s World War II Memorial, Governor Corzine stated: "We're hopeful that we will be able to sustain it [the Property Tax Rebate Program], but I can't promise anything in this environment…" To read more, please click the words Property Tax.

The New Jersey Division of Taxation just released the New Jersey State Tax News for Fall 2008. This eleven page publication covers issues ranging from recent Tax Court opinions, to current legislative laws being considered, to small business workshops. To read the full publication, please click the words Property Tax.

According to today’s DailyRecord, “Assembly Republicans denounced new affordable housing regulations that took effect this summer as ‘devastating’ to New Jersey and vowed Tuesday to focus most of their legislative efforts this fall on revising them.” This effort is based on the realization that the new rules will lead, as some believe, to higher property taxes, overdevelopment and less open space. In part, the Republicans are looking to reduce the number of affordable houses required to be built each year from 115,000 to some more reasonable level. One idea to accomplish this is by using New Jersey’s plethora of foreclosed homes to solve the state’s needs for affordable housing. Please click the words Property Tax to read the DailyRecord’s full article.

According to the Tax Foundation: “New Jersey taxpayers bear the heaviest state-local tax burden in 2008” and paid on average 11.8% of their income in state and local taxes. New York was a close second behind New Jersey with a 11.7% burden. Alaska had the lightest burden, with a mere 6.6% burden. The Tax Foundation’s full article may be found HERE.

Governor Jon S. Corzine and State Treasurer David Rousseau announced that the deadline for both homeowners and tenants to file their 2007 homestead rebate applications has been extended to October 31, 2008. The deadline for filing 2007 Senior Freeze (Property Tax Reimbursement) applications has also been extended to October 31, 2008.

CNN reported today that a glitch in a Wells Fargo's computer system resulted in 900 taxpayers receiving a property tax bill for one penny. A video on CNN.com that discusses this mistake may be found HERE.

As released yesterday by the New Jersey Division of Taxation:

"The Division of Taxation is now in the process of mailing 2007 homestead rebate applications to homeowners who are under age 65 and who are not disabled. This is the second of two mailings for the program this year; applications were mailed in May to homeowners who were senior citizens (age 65 or older) or disabled.

The current mailing of application packets will be staggered over a two-week period starting July 3, 2008. The deadline for filing these applications is August 15, 2008.

Some senior and disabled homeowners may receive an application packet in this mailing, even though they have already filed for the 2007 homestead rebate. Homeowners who have already filed their applications online or by phone and received a confirmation number, or who have completed and mailed in a paper application, should not file again.

The homestead rebate application delivery dates by county are:

Morris, Ocean - July 3

Atlantic, Essex, Monmouth, Sussex - July 7

Camden, Hudson, Hunterdon, Salem, Somerset - July 10

Gloucester, Mercer, Middlesex, Passaic - July 12

Bergen, Burlington, Cumberland, Warren - July 16

Cape May, Union - July 18"

Click HERE for additional information on the 2007 homestead rebate.