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NOT FOR PUBLICATION WITHOUT THE APPROVAL
OF THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
DOCKET NO. 005784-93
HARRIS CORPORATION, :
:
Plaintiff, :
:
v. :
:
DIRECTOR, DIVISION OF :
TAXATION, :
:
Defendant. :
Decided: August 3, 1995
Charles M. Costenbader for plaintiff
(Stryker, Tams & Dill, attorneys).
Marlene G. Brown for defendant
(Deborah T. Poritz, Attorney General of New Jersey,
attorney).
HAMILL, J.T.C.
This is a motion by defendant, Director, Division of
Taxation, to dismiss a state tax complaint for untimely filing.
On the return date of the motion, I ruled from the bench
that, for the tax years at issue, the time for filing a state tax
complaint commences to run on the date the Division of Taxation
mails its notice to the taxpayer, not on the date shown on the
Division's letter. I then gave the Director a period of time in
which to advise whether he wished to pursue a proof of mailing
hearing. The Director subsequently advised that he would not
submit proof of mailing. Instead, the Director filed a letter
brief arguing as a matter of law that the period for filing a
complaint commences on the date of the Director's action, (in this
case the date of the Director's letter) rather than on the date of
mailing.
In view of the Director's determination not to pursue a
proof of mailing hearing, I am denying the Director's motion to
dismiss the complaint for untimely filing. As I stated on the
record, without proof as to when the Division of Taxation's notice
denying plaintiff's refund claim was mailed, the Director has not
established that plaintiff's complaint was filed beyond the 90 days
allowed by N.J.S.A. 54:51A-14 plus three days for mailing as
allowed by R. 1:3-3.
To briefly summarize the pertinent facts, the Director
issued a letter on January 22, 1993 denying plaintiff's claim for
refund of corporation business tax. Plaintiff's complaint
challenging the refund denial was stamped received by the Tax Court
clerk's office on April 27, 1993, 95 days after the date on the
Director's letter. As the ninety-third day following January 22
was Sunday April 25, the statute of limitations (including three
days for mailing) expired on Monday April 26 assuming that the 90
days began to run on the date of the Director's letter. Thus,
according to the Director, the complaint was filed one day late.
Plaintiff argues, and I agree, that, under the statute
then in force and the pertinent court rules, the 90-day period did
not commence to run on the date of the Director's letter but rather
on the date the letter was mailed.
Although the applicable statutes and regulation, in
particular N.J.S.A. 54:51A-14, N.J.S.A. 54:10A-19.2, and N.J.A.C.
18:1-1.8(a), all suggest that the 90-day period commences to run on
the date of the Director's action, N.J.S.A. 54:10A-19.2 makes clear
that an appeal to the Tax Court is to be taken in accordance with
the State Tax Uniform Procedure Law. That law, in particular
N.J.S.A. 54:51A-18, provides in pertinent part that, "service and
all other matters with respect to the complaint ... shall be as
prescribed by rules of court." The rules of court, specifically R.
8:4-2(a), provide that, "[t]he time period [for filing a complaint]
shall be calculated from the date of service of the decision or
notice of the action taken." In Holmdel Tp. v. Director, Division
of Taxation,
12 N.J. Tax 112, 115-17 (App. Div. 1991), aff'd o.b.,
130 N.J. 522 (1992), the Appellate Division concluded that in
calculating the 90-day statute of limitations prescribed by
N.J.S.A. 54:51A-14, three extra days for mailing should be allowed
pursuant to R. 1:3-3 because N.J.S.A. 54:51A-18 mandates
application of the court rules to service of the complaint. If R.
1:3-3 applies in calculating the 90-day statute of limitations, so
too does R. 8:4-2(a).
Under R. 1:5-4(b) service is complete on mailing. The
common law rule is to the same effect. See Borgia v. Board of
Review,
21 N.J. Super. 462, 467 (App. Div. 1952) ("'service of
process by mail, when authorized, is deemed complete when the writ
is deposited in the post office, properly addressed and with the
proper amount of postage,'" (quoting 42 Am. Jur., "Process," §60,
p.48)). See also Amodio v. Civil Service Comm'n,
81 N.J. Super. 22, 27 (App. Div. 1963); 62B Am. Jur.2d., "Process," §228, p.926.
The evidence does not establish that the Director's
letter was mailed on the same day it was dated, viz. January 22,
1993. If mailed on the next business day, which was January 25,
the ninety-third day would have been April 28, and plaintiff's
complaint, received by the clerk on April 27, would have been
timely. As the Director has not proved that his letter was mailed
on January 22, he has not established that the complaint was filed
beyond the 90-day statute of limitations augmented by three extra
days for mailing.
In his post-argument letter brief, the Director takes the
position that the time to appeal to the Tax Court in a state tax
case runs from the date of the action to be reviewed, not from
service of the Director's action.
The Director argues that R. 8:4-1 pertaining to the time
for filing a complaint is divided into two subsections, subsection
(a) pertaining to local property tax appeals and subsection (b)
pertaining to state tax appeals. According to the Director,
subsection (a) is clear that the time for appealing a judgment of
a county board of taxation in a local property tax matter runs from
the date the judgment is mailed. On the other hand, according to
the Director, subsection (b) pertaining to state tax appeals is
clear that the 90 days run from the "date of the action to be
reviewed," and that date was the date of the Director's letter.
The argument continues that this dichotomy between local property
tax and state tax procedure is carried over to R. 8:4-2(a). Rule
8:4-2 pertains to the calculation of the time for filing a
complaint, and subsection (a) of the rule states: "General. The
time period shall be calculated from the date of service of the
decision or notice of the action taken." According to the
Director, "the date of service of the decision" starts the period
for appealing a local property tax matter, while "notice of the
action taken" starts the period for appealing a state tax matter.
If defendant were correct, the time to appeal in a state
tax matter would run, not from the date of the Director's action
but rather from the date when notice of the action was actually
received because only at that point would a taxpayer have "notice
of the action taken." It seems highly unlikely that the drafters
of R. 8:4-2(a) intended that the 90-day appeal period for state tax
matters should commence to run only when a taxpayer receives a
determination letter from the Director because the date of receipt
would be unknown to the Director and susceptible to manipulation.
There are two more plausible constructions of R. 8:4-2(a). The first is that the rule is intended to cover two
situations--(1) service of the taxing authority's determination by
mail, whether a county board judgment or a determination of the
Director, and (2) actual notice of the taxing authority's action,
e.g., hand delivery of a county board judgment or a determination
of the Director. The difficulty with this first construction is
that under the court rules, "service" may include both service by
mail and personal service, R. 1:5-2, and personal service would
provide actual notice, such that the phrase "notice of the action
taken" would be redundant. Additionally, had the drafters of the
rule intended that "service" and "notice" refer to two types of
notification, they presumably would have inserted the word "of"
before the word "notice" so that the sentence would have read, "The
time period shall be calculated from the date of service of the
decision or of notice of the action taken." Moreover, as plaintiff
points out, N.J.S.A. 54:50-6 specifies that any notice required to
be given by the Director pursuant to the State Tax Uniform
Procedure Law "may be served personally or by mailing the same to
the person for whom it is intended ...." (Emphasis added). As
service under the court rules may be by mail or in person, the
second and preferable construction of R. 8:4-2(a) is that the word
"service" in the sentence "The time period shall be calculated
from the date of service of the decision or notice of the action
taken" modifies both "decision" and "notice." Such service may be
personal or by mail. Under R. 1:5-4(b) service by mail, as was the
case here, is complete on mailing.
In further support of his position that R. 8:4-2(a)
differentiates the starting point for appealing a county board
judgment and an action of the Director, defendant points to the
rule's use of the word "decision" when the time is to be calculated
from service and use of the word "action" when service is to be
computed from notice of the action taken. Plaintiff responds, and
I agree, that the terms "decision" and "action" are not limited to
local property tax appeals in the case of "decisions" and state tax
appeals in the case of "actions". Either term may apply to either
type of tax as made clear by R. 8:2(a), which provides in part:
(a) General Jurisdiction. The
Tax Court shall have initial review
jurisdiction of all final decisions
including any act, action,
proceeding, ruling, decision, order
or judgment including the
promulgation of any rule or
regulation of a County Board of
Taxation, the Director of the
Division of Taxation, any other
state agency or officer (including
the Director of the Division of
Motor Vehicles) with respect to a
tax matter, or a county recording
officer with respect to the realty
transfer tax.
[emphasis added.]
As can be seen, a "decision" refers to any final act by any state
or local taxing authority. "Decisions" are not limited to
decisions of a county board, and "actions" are not limited to
actions of the Director of the Division of Taxation.
The conclusion that "decisions" and "actions" refer
interchangeably to determinations by county boards and the Director
is confirmed by the wording of R. 2:2-3(a)(2) governing appeals to
the Appellate Division. That rule provides in part: "Except as
otherwise provided ... appeals may be taken to the Appellate
Division as of right ... to review final decisions or actions of
any state administrative agency or officer ...." As in the case
of R. 8:2(a), R. 2:2-3(a)(2) does not limit agency decisions to one
type of agency and agency actions to another.
In Passaic v. Division of Tax Appeals,
54 N.J. Super. 215
(App. Div.), certif. denied,
29 N.J. 583 (1959), the Appellate
Division affirmed the Division of Tax Appeals' refusal to entertain
an untimely petition filed by Passaic from an action of the county
board of taxation. The Division's rules required that a petition
be filed within 30 days of the action or determination taken. The
City argued that under the court rules, the 30 days did not
commence to run until it had actual notice of the county board
action sought to be appealed. As quoted in the court's opinion, at
that time R. 1:3-1(b) "provide[d] for a 45-day period of appeal to
commence on the date of the service of the agency decision or of
the notice of the action taken." Id. at 218. The Appellate
Division held that the court rules did not apply to appeals to
administrative agencies such as the Division of Tax Appeals. Ibid.
Moreover, in view of the explicit language of the Division's rule,
there was no basis for construing it "as providing for the
commencement of the time for appeal upon the service or notice of
the action to [sic] the county board." Ibid.See footnote 1
This case involves the converse situation, but the
principles set forth in Passaic v. Division of Tax Appeals, supra,
apply. The court rules govern because N.J.S.A. 54:51A-18 requires
that all matters with respect to a complaint in the Tax Court are
as prescribed by the rules of court. Rule 8:4-2(a) is clear that
the time period for filing a complaint commences with "the date of
service of the decision or notice of the action taken." These
dates are not the same as the date of the Director's action, and
there is no room to interpret the rule as providing for the
commencement of the appeal period on the date of the Director's
action.
Thus the 90-day appeal period commenced to run when the
Director mailed his letter denying plaintiff's refund claim . As
the Director has not established the date on which the letter was
mailed, under the facts of this case, the Director's motion to
dismiss the complaint for untimely filing must be denied.See footnote 2
As I have concluded that plaintiff's complaint was timely
filed, another issue needs to be addressed. The issue is whether
plaintiff's failure to comply with the 30-day period for filing a
protest pursuant to N.J.S.A. 54:49-18 (as in effect for the period
at issue) is in and of itself a basis for dismissing the complaint.
I conclude that it is not. Under the statutory scheme for
appealing actions of the Director in state tax matters, there is no
requirement that a taxpayer exhaust administrative remedies before
filing a complaint in the Tax Court. See N.J.S.A. 54:51A-13 to -20; N.J.S.A. 54:49-18a. In other words, a taxpayer may choose to
bypass an administrative hearing and appeal direct to the Tax Court
from an initial assessment or denial of a refund by the Director.See footnote 3
If an administrative hearing may be bypassed intentionally, there
seems to be no reason to dismiss a taxpayer's complaint when an
administrative hearing is inadvertently requested beyond the 30-day
period specified by statute. The result should be the same whether
the bypass is intentional or inadvertent.
An unpublished opinion of this court which was cited in
and attached to the Director's papers, is not to the contrary. The
case does not stand for the proposition that the failure to request
a hearing within 30 days in and of itself bars a taxpayer's timely
appeal to the Tax Court. Under the facts of that case, not only
was the request for a hearing made beyond the 30-day limit but in
addition the complaint was untimely. Thus, the facts do not
support the conclusion that an untimely hearing request bars a
taxpayer's timely appeal to the Tax Court.See footnote 4
In light of my decision, there is no need to address
plaintiff's alternative argument that the complaint may have been
received by the Tax Court management office earlier than April 27,
1993, the day on which it was date-stamped "received". In any
event, plaintiff chose not to pursue discovery as to the procedures
in the Management Office for receiving and date stamping incoming
mail, and there is thus no factual support for the argument.
An order denying the Director's motion to dismiss the
complaint is enclosed.
Footnote: 1The court in Passaic adopted the first construction of the
rule suggested above at page 5 of this slip opinion, under which
"service" and "notice" refer to two different types of
notification. As quoted by the court, the wording of R. 1:3-1(b)
justified this result because the 30 day appeal period ran from
"the date of the service of the agency decision or of the notice
of the action taken." Passaic, supra, 54 N.J. Super. at 218.
Under current R. 2:4-1(b) and R. 8:4-2(a), the appeal period
commences with the "date of service of the decision or notice of
the action taken." Under this language, grammatically, the
second construction suggested above at page 5-6 of this slip
opinion is more plausible.
Footnote: 2I make no ruling on the point, but the result in this case
might be different under the Taxpayer Bill of Rights. Section 14
of that statute, L. 1992, c. 175, amended N.J.S.A. 54:49-18a to
specify that, "[t]he time for appeal to the Tax Court pursuant to
subsection a. of R.S. 54:51A-14 ... shall commence from the date
of the final determination by the director." The amended statute
does not apply in this case because §14 of the Taxpayer Bill of
Rights became effective for complaints filed on or after July 1,
1993, and the complaint in this case was filed on April 27, 1993.
N.J.S.A. 54:48-7(f).
Footnote: 3The result of bypassing an administrative hearing is that
the 90-day appeal period prescribed by N.J.S.A. 54:51A-14 runs
from the Director's initial action. Peoples Express Co., Inc. v.
Director, Division of Taxation,
10 N.J. Tax 417, 424 (Tax 1989).
Footnote: 4Under the Taxpayer Bill of Rights, effective July 1, 1993,
the 30-day period has been extended to 90 days, the same amount
of time for filing a complaint in the Tax Court. N.J.S.A. 54:49-18a.
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