All politics, the saying goes, is local. Not so with government, according to a recent decision from New Jersey’s Tax Court. In an opinion that teaches more about legislative drafting than it does about tax policy, the court in New Jersey Turnpike Authority v. Township of Monroe parsed a complex definition of “local government unit” in the Garden State Preservation Trust Act (GSPTA). It held that the New Jersey Turnpike Authority did not come within that definition, and thus could not claim that status to obtain an exemption from roll-back taxes on a parcel it purchased in 2009.
To mitigate the impacts of a construction project on wetlands, the Authority purchased some 400 acres of vacant land in Monroe Township for the purpose of donating it to the Department of Environmental Protection. The land was assessed as farmland for property tax purposes, but the Authority did not use it for agricultural or other permissible purposes. Monroe’s tax assessor then sought to impose three years of “roll-back” taxes on the land, as authorized both by the state Constitution and by statute, because the land had not been used for any purpose that entitled it to assessment as farmland.