Published Tax Court Opinions

Gourmet Dining, LLC v. Union Township, Kean University, andNew Jersey Educational Facilities Authority; Docket Nos. 016504-2013 and 012334-2014, opinion by Novin, J.T.C., decided March 14, 2018.For Gourmet Dining, LLC and Kean University – David B. Wolfe (Skoloff & Wolfe, P.C., attorneys); for defendant – Robert F. Renaud (Palumbo,Renaud & DeAppolonio, LLC, attorneys); for New Jersey Educational Facilities Authority – Marlene Brown (Gurbir Grewal, Attorney General of New Jersey, attorney). The court concluded that the portion of Kean University’s New Jersey Center for Science, Technology, and Mathematics building occupied, operated, and managed by Gourmet Dining, LLC, as Ursino restaurant was subject to local property tax for the 2013 and 2014 tax years. The court determined that Ursino restaurant was not a Kean University dining hall, and did not participate in, and was not part of, any meal plan offered by Kean University to its students, faculty, or administrators. Additionally, Ursino did not accept the students’ flexible dining currencies, or offer discounted meals to University students, faculty, or administrators. Thus, Ursino was not devoted to serving the basic needs of the University’s student body, faculty, or administrators, and failed to furnish a service directly related to the functions of government under N.J.S.A. 54:4-3.3. Moreover, Ursino’s operation was a private, profit-making commercial enterprise, and the payment of fees by Gourmet Dining, LLC to Kean University Foundation did not make the premises occupied by Ursino restaurant a building used for colleges, schools, academies or seminaries, as contemplated under N.J.S.A. 54:4-3.6. Finally, the court concluded that the New Jersey Center for Science, Technology and Mathematics building is an educational facility under the New Jersey educational facilities authority law, N.J.S.A. 18A:72A-2 to -83. However, the operation and management of Ursino restaurant was not a project of the New Jersey Educational Facilities Authority. Significantly, Gourmet Dining, LLC was not an agent of the New Jersey Educational Facilities Authority, as such term is construed under N.J.S.A. 18A:72A:18. Therefore, application of N.J.S.A. 18A:72A-18 to Gourmet Dining, LLC’s use, occupancy, operation, and management of Ursino restaurant does not afford it an exemption from local property tax. (39

Christian Mission John 316 v. Passaic City; Docket No. 013203-2013, opinion by Novin, J.T.C., decided February 28, 2018. For plaintiff – Tova L. Lutz (Lutz Law Group, LLC, attorneys); for defendants – Kenneth A. Porro (Chasan Lamparello Mallon & Capuzzo, P.C., attorneys). The court concluded that a former commercial warehouse building, undergoing substantial renovations to convert it into a church sanctuary, offices, and meeting space, was not in actual use as of the assessing date under N.J.S.A. 54:4-3.6. Thus, the property was not entitled to an exemption from local property tax for the 2013 tax year. The taxpayer’s goal, intent, or objective to furnish religious services for public benefit, at some future date, was insufficient to establish the requisite quid pro quo required under N.J.S.A. 54:4-3.6. The court interpreted the phrase “actually used” under N.J.S.A. 54:4-3.6, as implying that the use cannot be achieved at the expense of the safety, welfare, and wellbeing of the public, the intended beneficiaries of the non-profit entity’s bounty.

National Auto Dealers Exchange, L.P. v. Director, Division of Taxation, Docket No. 000028-2014. Opinion by Andresini, P.J.T.C., decided February 26, 2018. For plaintiff - Marc A. Simonetti (Eversheds Sutherland (US) LLP, attorneys); for defendant - Michael J. Duffy (Gubrir S. Grewal, Attorney General of New Jersey). Plaintiff moved for summary judgment on grounds that defendant lacked statutory authority to issue an assessment of Corporation Business Tax (“CBT”). Plaintiff is a New Jersey limited liability partnership consisting of two foreign corporate partners. For years 2004-2009 each partner provided the partnership with a signed consent to New Jersey taxation (Form NJ- 1065E) and paid New Jersey Corporation Business Tax on its distributive shares of New Jersey partnership income by filing its own CBT return. In 2011, the limited partner requested a refund of CBT payments for 2004-2009 alleging lack of nexus with New Jersey under the CBT Act. Defendant denied the partner’s refunds, and the partner filed a complaint with the Tax Court. The defendant audited plaintiff and assessed a deficiency on plaintiff under N.J.S.A. 54:10A-15.11, which requires partnerships to withhold and remit CBT on behalf of nonresident corporate limited partners. Plaintiff filed this complaint and moved for summary judgment arguing that under N.J.S.A. 54:10A-5.7, when a partnership obtained a partner’s consent to New Jersey taxation, its obligation under 54:10A-15.11has been satisfied. The court held that the assessments for tax years 2004-2005 were barred by the statute of limitations and declared the assessments for years 2006-2009 void as a matter of law. The court held the defendant lacked statutory authority to issue an assessment of CBT against plaintiff as CBT Act only required the partnership to either collect the partner’s Form NJ-1065E or remit CBT on the partner’s behalf to be fully relieved of any further CBT obligations.

Harsh P. Parikh and Jayan P. Desai v. Livingston Township; Docket Nos. 013603-2016; 013605-2016, opinion by Nugent, decided on January 25, 2018, released for publication February 26, 2018. For plaintiff - Michael I. Schneck (Schneck Law Group L.L.C.); for defendant - Sharon L. Weiner (Murphy McKeon, P.C.). Taxpayers undertook a residential addition and alterations pursuant to a township building permit obtained February 5, 2015. A certificate of occupancy dated August 7, 2015 issued for the completed work was received by the assessor November 4, 2015. In October 2016, the assessor levied two added assessments on the property, representing value added for fullyear 2016 and for the final four months of 2015. The county tax board affirmed the assessments and taxpayers appealed the judgment to the tax court. Both N.J.S.A. 54:4-63.2 and 63.3 permit the local authority to tax value added to the property by the taxpayer through work completed after the October 1 pre-tax year valuation date established in N.J.S.A. 54:4-23. The tax court reasoned that only the 2015 partial levy constituted a valid omitted added assessment based on the date the alterations were completed. The assessor’s November 2015 discovery of alterations to the property completed before October 1, 2015, failed to satisfy the plain language of N.J.S.A. 54:4-63.2 necessary to sustain the full year 2016 added assessment. The court found the assessor had arrived at an erroneous determination of the property value on October 1, 2015 for tax year 2016, and that a remedy was available to the taxing authority through the normal tax appeal process. Finally, Township’s argument that it is common practice among assessors in the State to impose an added assessment upon discovery of alterations through receipt of the certificate of occupancy, regardless of the date the work is completed, is unavailing.