Paramus Associates, LLP/Home Depot USA Inc. v. Borough of Paramus, No. 002755-2012; Tax Court; opinion by Nugent, J.T.C.; decided and approved for publication August 2, 2013. DDS No. 35-5-0925 [14 pp.]
This tax appeal challenges the assessment of two contiguous lots owned by plaintiff that contain a retail store and an adjacent parking area. The assessor for Paramus sent a separate request form for each lot seeking financial information for use in reaching the property tax assessments for 2012, pursuant to N.J.S.A. 54:4-34 (Chapter 91 request).
Plaintiff owns the property listed as Block 5201, Lot 3 and Lot 8 on the tax map of Paramus, also known as 526 Route 17, Paramus. Lot 8 is the site of the retail store and Lot 3 contains the adjacent parking area and access road. The contiguous lots are in fact one economic unit controlled by a singular lease agreement between plaintiff and Home Depot as the sole tenant and the relevant lease has been provided to defendant in the course of discovery proceedings filed in previous years.
When plaintiff/taxpayer Paramus Associates prepared and returned the requested Chapter 91 income and expense information for the property using just one form rather than two, defendant moved to dismiss the complaint for failure to comply with the statute.
Held: A taxpayer that receives two Chapter 91 requests for two separate lots governed by a singular lease agreement has not "failed or refused to respond" pursuant to N.J.S.A. 54:4-34 having submitted income and expense information for both tax parcels in the form of a single response.
Plaintiff contends that through the timely submission of all the relevant income and expense data for both lots in one submission it has not "failed or refused to respond" within the meaning of N.J.S.A. 54:4-34. Further, the two tax parcels are so inextricably intertwined by virtue of being an economic unit controlled by a single lease agreement, it would be impossible to extrapolate the specific income and expense items attributable to each individual tax parcel. Plaintiff also asserts that it "received two (2) redundant requests for the same set of income and expense data." Because of this, plaintiff argues it was not clear that a response to both forms was required, thereby rendering the Chapter 91 requests deficient.
The legal issue before the court is one of first impression: whether a taxpayer that receives two Chapter 91 requests for two separate lots governed by a singular lease agreement has "failed or refused to respond" pursuant to N.J.S.A. 54:4-34 having submitted income and expense information for both tax parcels albeit in the form of a single response.
The sanction of dismissal sought by defendant is only appropriate on the occasion that a taxpayer has "failed or refused to respond" to the assessor's Chapter 91 request. Furthermore, when a Chapter 91 request is unclear as to what response is being sought, a property owner may not have its appeal dismissed for failure to timely respond. In this matter, plaintiff property owner timely submitted the property's income and expense information to the assessor, albeit on a single response form.
If the court accepts the argument that plaintiff's actions constitute an outright "failure or refusal to respond," it would give rise to a dismissal of the appeal under N.J.S.A. 54:4-34 despite plaintiff's compliance with the statute in having provided income information for the property. Rather, the court accepts as credible plaintiff's contention that because Home Depot and the parking lot operate under the lease as an economic unit, the income and expense information is so intrinsically intertwined that the information for each lot could not have been separately provided. And further, all of the income and expense information was provided for both tax parcels in a timely manner in response to Lot 8, as certified to by plaintiff.
Here, dismissal of the appeal for the taxpayer's failure to provide a separate response for the parking and roadway given the particular language of the assessor's request is of concern to this court. To that point, the assessor sent the identical form for both lots. He did not fashion the Lot 3 request in language directed to a parking lot and access road. In fact, the form specifically excludes consideration of the parking lot. Accordingly, defendant's assertion that the appeal should be dismissed for failure to respond to the Lot 3 request with separate financial information regarding the parking lot and roadway is obviated by the language of the form that should have made that request clear. The harsh sanction of dismissal under these facts would run afoul of the decided case law.
Defendant's motion is denied.
For plaintiff — Adam R. Jones (Garippa, Lotz & Giannuario). For defendant — Marc A. Raso.