NJ Tax Court: Witness Not Needed to Advance an Appeal
There was an interesting decision published by NJ's Tax Court the other day in the case of Princeton Alliance Church v. Mount Olive Township, Docket No. 014826-2009. Here's the skinny:
PAC filed an Appeal claiming that a part of its property was exempt from taxation b/c its use was partially restricted by virtue of the fact that it is located within the Highlands Preservation Area as defined by NJ's Highlands Act. (N.J.S.A. 13:20-1, et seq.) Before the Appeal was heard by the Board, PAC's attorney submitted a brief which included both a statement of facts and legal argument. In essence, PAC was arguing that the State has acquired a portion of its property by placing it within the Highlands Preservation Area so as to make that portion exempt from taxation under N.J.S.A. 54:4-3.3b.
Here's where things get interesting: on the date of the Hearing, PAC's attorney appeared w/o any witnesses to present. Instead, he indicated that there were no contested facts and sought leave to present legal argument in support of the Appeal. He was instructed twice to present his witnesses but, alas, he had none to present. The Board then dismissed the Appeal for lack of prosecution. PAC filed a timely appeal to NJ's Tax Court and Mt. Olive filed a Motion to Dismiss pursuant to N.J.S.A. 54:51A-1c.
In a well-reasoned decision, Judge Bianco denied Mt. Olive's Motion to Dismiss for lack of prosecution for several reasons:
- Dismissal under N.J.A.C. 18:12A-1.9(e) for lack of prosecution was inappropriate b/c PAC's attorney had appeared for the Hearing. Under the regulation, dismissal for lack of prosecution is only available when the taxpayer fails to appear at all, which was not the case.
- Mt. Olive's reliance on caselaw requiring a taxpayer to present "some proofs as to true value" was misplaced b/c the issue at hand was not valuation but, rather, exemption which makes the holding inapplicable. Moreover, even if valuation was at issue, the Board's dismissal for failing to call a witness would still have been unwarranted as there is no statute, regulation or caselaw that specifically requires a taxpayer to present witnesses in order to advance an appeal. (The evidentiary "proofs" required on valuation cases can be presented via cross-examination and documents.)
- The Tax Board had an obligation to hear the legal argument from PAC's attorney under the applicable circumstances: PAC's property was only assessed at $153,000.00 meaning that it could not take a direct appeal to the Tax Court under N.J.S.A. 54:3-21. (The assessed value has to be over $750,000.00 for a direct appeal.) If the Board failed to hear legal argument on an exemption issue, PAC and similarly situated taxpayers would be left w/o a forum to contest its assessment because -- with an assessed value at $153,000.00 -- it could not be heard directly by the Tax Court.
PAC's decision not to present any witnesses was incredibly gutsy and ultimately rewarded. I'm not sure that the merits of its exemption argument are going to be equally well received.
Here's the moral of the story, from my point of view: if your appeal includes issues of value, get yourself an expert witness and bring him/her to the hearing, for gosh sake; if you're arguing only exemption make sure that you submit a brief with undisputed facts and argument and bring a copy of the above case with you!
