Chapter 91 – Failure to Comply Still Absolute Bar to Tax Appeal in N.J.

In United Parcel Service v. Secaucus, UPS failed to properly respond to a request for information as to income and expenses made by the tax assessor pursuant to N.J.S.A. 54:4-34, universally known as a “Chapter 91 request.” Later, when UPS brought an action in the Tax Court to challenge its 2011 assessment, the assessor moved to have the action dismissed due to UPS’s failure to properly respond to the Chapter 91 request. This is what a tax assessor typically does in these circumstances because the statute is clear that the failure of the owner to respond to a Chapter 91 request within 45 days is an absolute bar to the right to bring an appeal of the assessment.

The Tax Court, noting the “severity of the sanction,” also noted the trend in the cases to hold the assessor to strict compliance with its obligations when making a Chapter 91 request, i.e., providing a copy of the statute and adequate notice to the property owner framed in language that is both clear and unequivocal. Here, where the tax assessor could not produce a copy of its notice, and there were various issues of proof, the Tax Court ruled that the Chapter 91 request was defective and UPS could prosecute its appeal.

So if a property owner fails to respond or properly respond to a Chapter 91 request and then brings an appeal of its assessment, the property owner might be able to defeat the assessor’s motion to dismiss for failure to comply with the Chapter 91 request by demonstrating some element of the assessor’s request did not meet the assessor’s obligations with regards thereto. That’s good to know, and might be very useful in the right circumstances. But that’s not the lesson here. The lesson is to respond to Chapter 91 requests in a timely and informative manner. Then, should the taxpayer bring an appeal, the assessor will not be in a position to even raise Chapter 91 as a basis to dismiss the property owner’s appeal.

Shepard A. Federgreen is a Director in the Gibbons Real Property & Environmental Department.
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