Biz owners: If town overtaxes you, this would let it keep $$ for 3 years
A bill more than halfway through the legislative process seeks to give municipalities a break at the expense of businesses who win property tax appeals.
Current law says a municipality has to refund any overpaid taxes, plus interest, within 60 days after a property tax appeal succeeds. If A2004/S2673 becomes law, that would still be the schedule for homes, but nonresidential property owners could have to wait 18 times longer – up to three years, with payments coming in installments.
Andrew Musick, vice president of government affairs for the New Jersey Business and Industry Association, said that money is “rightfully owed” to the tax appeal winner and that if the timetable must change, perhaps the repayment should be required within 6 months.
“We feel that the changes to the tax appeal process make it more difficult to operate a business here in the state and further contribute to the state’s challenging business climate,” Musick said.
Its backers, such as sponsor Assemblyman Robert Karibinchak, D-Middlesex, say it would protect towns and taxpayers from large, unbudgeted expenses that often force a municipality to borrow money to afford.
“This is not here to hurt anyone. This is here to protect our homeowners, our constituents that have the result of a tax appeal,” Karibinchak said. “Every town has to deal with this.”
Karibinchak was on the Township Council in Edison when the Raritan Center and Heller Park industrial parks filed $100 million in tax appeals at the time of the last economic downturn. He also notes the crippling impact that casinos’ property tax appeals have had on Atlantic City’s municipal budget.
“And that debt shifts directly to the homeowners. There’s no place else. It goes right to the homeowners,” he said.
Commercial, industrial and apartment properties last year accounted for nearly 20 percent of all tax appeals in the state. They account for around 5 percent of all the land parcels in the state.
Lisa Chapland, director of government affairs for the New Jersey State Bar Association, said the legislation would make businesses wait three years for money they shouldn’t have paid in the first place.
“This is a successful tax appeal. That means that the entity has been overpaying its taxes. And what you’re now doing is you’re asking that entity to wait three years to get money that is rightfully theirs back,” Chapland said.
Musick said tax appeals are already often “long and tedious” and worries the change could also discourage municipalities from settling cases if they know they’ll have three years to repay it, anyway.
“These changes could create a situation where it would benefit a town to over-assess a nonresidential property taxpayer, knowing they have additional time to pay back the overpayment,” Musick said.
The bill was passed 51-22 by the Assembly last June, then endorsed by the Senate Community and Urban Affairs Committee last month. It’s now pending in the Senate budget committee, which will probably meet a few times this month as part of adopting the fiscal 2020 state budget.
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