|
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
Patrick DeAlmeida R.J. Hughes Justice Complex
Presiding Judge P.O. Box 975
Trenton, New Jersey 08625-0975
(609) 292-8108 Fax: (609) 984-0805
March 2, 2
012 Madge P. Bolden 1129 Martine Avenue
Scotch Plains, New Jersey 07076
Carl Wohlleben
Deputy Attorney General
Division of Law
R.J. Hughes Justice Complex
P.O. Box 106
25 Market Street
Trenton, New Jersey 08625-0106
Re: Madge P. Bolden v. Director, Division of Taxation
Docket No. 016536-2011
Dear Ms. Bolden and DAG Wohlleben:
This letter constitutes the court’s opinion after trial in the above-referenced matter in
which plaintiff challenges the final decision of the Director, Division of Taxation denying her
application for a homestead property tax reimbursement for tax year 2010. For the reasons
explained more fully below, the Director’s decision is affirmed.
*
I. Procedural History and Findings of Fact
Plaintiff Madge P. Bolden, who is 75 years old, was unable to appear in person for the
trial of this matter. To accommodate Ms. Bolden the court conducted the trial telephonically.
Because this matter is assigned to the small claims division, the hearing was conducted pursuant
to, R. 8:11(a)(1), which provides that “hearings shall be informal and the court may hear such
testimony and receive such evidence as it deems necessary or desirable for a just and equitable
determination of the case,” R. 8:11 (b). Although the court did not have the opportunity to
observe Ms. Bolden, the court finds that she was credible and provided testimony forthrightly
and without evasion. Based on the evidence gathered during the trial, as well as the documents
submitted by the parties prior to trial, the court makes the following findings of fact.
During 2010, Ms. Bolden owned the residence at 1129 South Avenue in Scotch Plains
Township, Union County. Ms. Bolden completed a timely application for a homestead property
tax reimbursement for tax year 2010. The application indicated that the total 2010 property taxes
paid by Ms. Bolden on her residence were $6,631. After application of her total base year
property taxes of $5,730, Ms. Bolden sought a property tax reimbursement of $901.
On September 14, 2011, the Director issued a notice denying Ms. Bolden’s homestead
property tax reimbursement application. The reason for the denial was stated succinctly: “We
have been notified by your local tax collector that your property taxes were not paid in full by
June 1, 2011.” Undisputed evidence admitted at trial establishes that as of June 1, 2011, Ms.
Bolden had paid $3,180.89 in taxes on her property. Two subsequent payments by Ms. Bolden
of $1,724.95 each, for a total of $3,449.90, were posted by the tax collector on July 11, 2011.
On October 20, 2011, Ms. Bolden filed a timely appeal with this court challenging the
Director’s decision. In her Complaint, Ms. Bolden acknowledges that the taxes on her property
2
were not paid in full until July 2011. She argues that the purpose of the homestead property tax
reimbursement is not furthered by a strict application of the June 1st payment date criterion in the
controlling statute, N.J.S.A. 54:4-8.67.
II. Conclusions of Law
The court’s analysis begins with the familiar principle that the Director’s interpretation of
tax statutes is entitled to a presumption of validity. “Courts have recognized the Director’s
expertise in the highly specialized and technical area of taxation.” Aetna Burglar & Fire Alarm
Co. v. Director, Div. of Taxation,
16 N.J. Tax 584, 589 (Tax 1997) (citing Metromedia, Inc v.
Director, Div. of Taxation,
97 N.J. 313, 327 (1984)). The scope of judicial review of the
Director’s decision with respect to the imposition of a tax “is limited.” Quest Diagnostics, Inc. v.
Director, Div. of Taxation,
387 N.J. Super. 104, 109 (App. Div.), certif. denied,
188 N.J. 577
(2006). The Supreme Court has directed the courts to accord “great respect” to the Director’s
application of tax statutes, “so long as it is not plainly unreasonable.” Metromedia, supra,
97 N.J. at 327. See also GE Solid State, Inc. v. Director, Div. of Taxation,
132 N.J. 298, 306 (1993)
(“Generally, courts accord substantial deference to the interpretation an agency gives to a statute
that the agency is charged with enforcing.”)
In addition, the Appellate Division has instructed this court to construe the statutes
defining eligibility for homestead rebates narrowly. MacMillan v. Director, Div. of Taxation,
180 N.J. Super. 175, 178 (App. Div. 1981), aff’d,
89 N.J. 216 (1982). “[T]ax preference
provisions are strictly construed against those claiming exemption. This is so with regard to
local property taxes. It is also true with respect to state taxes.” Ibid. (citations omitted). Where
the homestead rebate “statute is outspoken and unambiguous” its terms must be strictly applied.
Id. at 179. Accord Fedders Fin. Corp. v. Director, Div. of Taxation,
96 N.J. 376, 384-86 (1984);
3
Vavoulakis v. Director, Div. of Taxation,
12 N.J. Tax 318, 329 (1992) , aff’d o.b.,
13 N.J. Tax
322 (App. Div. 1993).
In 1975, our Constitution was amended to authorize the enactment of laws to allow
homeowners and residential tenants “a rebate or a credit of a sum of money related to property
taxes paid by or allocable to them at such rates and subject to such limits as may be provided by
law.” N.J. Const. (1947) Art. VIII, §1, par. 5. Since that time, the Legislature has enacted a
series of homestead rebate programs for resident homeowners and tenants. Vavoulakis v.
Director, Div. of Taxation, supra,
12 N.J. Tax at 323-24. Although the programs have had
various names and eligibility requirements, the purpose of the programs has consistently been
“the beneficent purpose of alleviating the heavy realty tax burden.” Rubin v. Glaser,
83 N.J.
299, 307, app. dis.,
449 U.S. 977,
101 S. Ct. 389,
66 L. Ed. 2d 239 (1980).
A homestead property tax reimbursement is available to any person sixty-five or more
years of age or who is disabled who meets certain income limits and who, as a “homeowner, has
made a long-term contribution to the fabric, social structure and finances of one or more
communities in this State, as demonstrated through the payment of property taxes . . . on any
homestead . . . used as a principal residence in this State for at least 10 consecutive years at least
three of which as owner of the homestead for which a homestead property tax reimbursement is
sought prior to the date that an application for a homestead property tax reimbursement is filed.”
N.J.S.A. 54:4-8.67. The amount of the reimbursement is the difference between the amount of
property tax due in the year for which the reimbursement is claimed and the amount due in the
“base year.” Ibid. The “base year” is tax year 1997 or the first year in which a claimant
becomes eligible for a reimbursement after December 31, 1997. Ibid.
4
For purposes of the homestead property tax reimbursement tax year is defined as “the
calendar year in which a homestead is assessed and the property tax is levied thereon and it
means the calendar year in which income is received and accured.” N.J.S.A. 54:4-8.67. In
addition, a homestead must be a “dwelling house” which “is owned and used by the eligible
claimant as the eligible claimant’s principal residence.” Ibid. To qualify for the reimbursement,
a claimant must own the residence, be 65 or over, and meet annual income limitations during the
tax year at issue. Because the tax year is defined as the calendar year, a claimant must satisfy the
statutory obligations as of December 31st of the tax year.
In addition, the Legislature limited the taxes eligible for reimbursement to those paid by
June 1st of the year following the tax year for which reimbursement is sought. The controlling
statute provides:
“Property tax” means the general property tax due and paid as set
forth in this section, on a homestead, but does not include special
assessments and interest and penalties on delinquent taxes. For the
sole purpose of qualifying for a benefit under P.L. 1997, c. 348
(C.54:4-8.67 et seq.), property taxes paid by June 1 of the year
following the year for which the benefit is claimed will be deemed
to be timely paid.
[N.J.S.A. 54:4-8.67.]
As of June 1, 2011, Ms. Bolden had paid $3,180.89 in taxes on her property. Because her
base year taxes under the statute are $5,730, she was not eligible for a reimbursement. By June
1, 2011, Ms. Bolden had paid less than her base year taxes. It was not until July 11, 2011, that
Ms. Bolden’s two $1,724.95 payments, totaling $3,449.90, were made. These payments, had
they been made on or before June 1, 2011, would have raised Ms. Bolden’s qualified tax
payments to $6,630.79, an amount exceeding her base year taxes and qualifying her for a
reimbursement of $900.79. Ms. Bolden, however, did not make the two payments of $1,724.95
5
until July 2011. Because those payments were made beyond the statutorily defined eligibility
period, they cannot form the basis for a homestead property tax reimbursement.
Ms. Bolden argues that she was unaware of the June 1st eligibility provision and would
have made the two $1,724.95 payments sooner had she known that the late payments would
jeopardize her reimbursement. The fact that Ms. Bolden was not aware of the statutory
eligibility requirements for a homestead property tax reimbursement, however, is not material to
the court’s decision. “Every person is conclusively presumed to know the law; ignorance is no
excuse.” Schirmer National Co. v. Dir., Div of Taxation,
17 N.J. Tax 495, 502 (Tax 1998), aff’d,
17 N.J. Tax 47 (App. Div. 2000). Furthermore, “a statute does have the effect, immediately
upon its enactment, of giving notice to all persons that the law will be as set forth in the statute,
on and after the specified date for it to come into effect.” Brasko v. Duchek,
127 N.J. Eq. 567,
14 A.2d 477 (Prerog. Ct.1940). Ms. Bolden is charged with knowledge of the statutory
requirement for a homestead property tax reimbursement.
Ms. Bolden also argues that strict enforcement of the June 1st eligibility date contravenes
the purpose of the homestead property tax reimbursement statute. According to plaintiff, the
reimbursement program is designed to assist older taxpayers with a long connection to the State
in retaining and maintaining their homes. Ms. Bolden argues that she struggles to make her tax
payments on time, as evidenced by the two July 2011 payments, and that she needs the $900 to
continue to maintain her home, which she has no intention of leaving as long as financially
feasible. While the court acknowledges the logic of Ms. Bolden’s arguments, the statutory
provision is clear. The Legislature established clear parameters for eligibility for the
reimbursement, including a requirement that to be eligible for reimbursement taxes must be paid
6
by June 1st of the year following the year for which reimbursement is sought. Ms. Bolden did
not satisfy that condition.
The Legislature is accorded significant leeway when enacting a tax benefit and
authorizing the expenditure of State funds. It exercised its prerogative to limit reimbursement to
taxes paid on or before a specified date. A payment eligibility date makes perfect sense, as the
Legislature must determine the amount of benefits a reimbursement program can be expected to
entail for annual budgeting purposes. The court lacks the authority to rewrite the statute or
excuse the June 1st statutory eligibility provision, even if, as Ms. Bolden argues, awarding her a
reimbursement of taxes paid after June 1st of 2011 would assist her in maintaining her home. It
is this court’s obligation to enforce unambiguous statutory provisions, regardless of whether a
variation of those provisions might accommodate a particular taxpayer or better accomplish the
stated goals of the law.
The Tax Court Clerk will enter Judgment affirming the Director’s Final Determination.
Very truly yours,
Patrick DeAlmeida, P.J.T.C.
7
|