The New Jersey State Bar Association (NJSBA) testified before the Senate Community and Urban Affairs Committee last week to express concerns about permitting municipalities to refund excess property taxes paid by a taxpayer who prevails on a tax appeal. The bill, A-862 (Chiaravalloti)/S-926 (Pennacchio), passed through the committee and is headed to the full Senate for a vote.
“We must not lose sight of the fact that the refunds owed to taxpayers in these matters are a result of the overpayment of property taxes to the municipalities,” said NJSBA Taxation Law Section member Michael A. Rienzi, of Brach Eichler. “Oftentimes municipalities will have taxpayer money for years before they have to issue refunds; legislation should not create further delay in this process.”
The bill would permit a municipality to refund the amount owed to a taxpayer as a credit, including any interest that accumulates until the excess is fully returned, which would be applied against the balance of the property taxes that become due and payable. Any excess that has not been fully refunded to the taxpayer after three years must be refunded in full.
The NJSBA pointed out there may be administrative difficulties in the day-to-day execution of this bill, including difficulties in retrieving such refunds through mortgage companies for those taxpayers who pay their taxes with their mortgage. Turnover in real estate would further complicate the matter, such as when a resident sells a property and a refund has not yet been fully credited.
The bill is intended to relieve municipalities from paying property tax appeal funds within 60 days—a decision that could increase fiscal pressures. But the NJSBA noted repayment over three years incurs interest, which is often waived or significantly reduced upon a settlement of the matter to pay within a fixed period of time.
“As an attorney whose sole focus for nearly 15 years has been property tax litigation, I speak from personal experience when I say that the best way to resolve property tax appeals is through settlement. Trials in these matters are expensive and delay resolution, sometimes for years, which is in neither parties’ best interest,” Rienzi said.
The NJSBA has reached out to the bill’s sponsors in an effort to ameliorate these concerns, and continues to monitor this legislation.
Domestic Violence Package Released from Assembly Committee
The Assembly Judiciary Committee has released a package of bills to require domestic violence training for police, judges and prosecutors. The NJSBA supports A-1763 (Munoz)/S-386 (Weinberg), A-1770 (Munoz)/S-385 (Weinberg) and A-1964 (Stanley)/S-384 (Weinberg), which makes mandatory domestic violence training.
“These bills serve an important role in the protection of our citizens from domestic violence and encourages a broader understanding of the needs of these individuals,” the NJSBA said in a statement.
The bills now head to the full Assembly for a vote.
This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters. To learn more, visit njsba.com.