It is crucial for owners and other taxpayers of commercial, industrial, retail and other income producing properties to be on the lookout for the “Silent Killer” of tax appeals, commonly known as Chapter 91 requests. New Jersey law permits a municipality to request income and expense statements from owners of income producing properties on an annual basis (N.J.S.A. 54:4-34). The request (referred to as a Chapter 91 request) must be made in writing, served by certified mail, and must enclose a copy of the statute providing the authority to make the request. A property owner has 45 days to respond to the Chapter 91 request or risk having a subsequent tax appeal dismissed by the County Tax Board or New Jersey Tax Court. Property owners should be aware of the following:
- Now is the time to be on the lookout for Chapter 91 requests since many tax assessors mail the requests during the summer. If tax bills are sent to a location outside of New Jersey (ie., accounts payable department located at corporate headquarters), it is advisable to make certain that the Chapter 91 request is sent to the person responsible for completing the request immediately.
- Complete the entire form accurately. If a form is not complete or is misleading, the tax appeal may still be dismissed.
- Although the statute appears to limit the request to income producing properties, that can be misleading. For example, an owner-occupied office building can be considered “income producing” in this situation. Also, if the property was income producing in a particular year, and vacant the following year for renovations, the property owner should still complete the form and advise the tax assessor that the property is now vacant. Also, inter-company leases or arrangements need to be disclosed. When in doubt, send in a response.
- When responding to the Chapter 91 request, file the response to the tax assessor (not the township attorney) via certified or registered mail, overnight delivery service or in person so it is received within 45 days. There have been numerous cases where property owners allege they mailed their response, but the municipality denies receiving the response. In those circumstances, the Court is often required to hold an expensive plenary hearing to hear the testimony of the property owner and municipal assessor in order to decide whether the response was mailed. This is a costly way to start a tax appeal and can be avoided by obtaining a certified mail receipt.
While an assessor of any municipality can serve a Chapter 91 request, taxpayer vigilance is particularly key in municipalities undergoing a revaluation. In Central New Jersey, Hamilton Township, Plainsboro, Trenton and possibility Ewing Township are in the process of completing revaluations. If the revaluations are completed in 2015, virtually every tax assessment in these municipalities will change in 2016. In order to make certain you preserve your right to appeal your 2016 tax assessment, make certain you comply with any Chapter 91 requests in a timely manner. Failure to do so may result in a high tax bill in 2016, with no recourse. For more information on Chapter 91 requests or tax appeals, please contact Stark & Stark or visit www.NJLawBlog.com.