Summer is the time that commercial owners and tenants of New Jersey properties should pay close attention to Chapter 91 requests issued by municipal assessors. Chapter 91 is a state law that has been used to claim many a worthy appeal filed with the Tax Court and the County Boards of Taxation over the years. We recommend that any taxpayer contemplating tax relief and seeking a reduction in property taxes for non-residential property timely respond to Chapter 91 requests.
The municipal assessor will mail a request to the addressee of record requesting completion of a summary of the income and expenses for an income-producing property – the so-called Income and Expense (I&E) statement. The I&E statement comes in a prescribed format. It is geared to capture information from income-producing properties, but even owners of owner-occupied commercial properties must comply to preserve the right to appeal an assessment. It is not a defense in a tax appeal that the property is not income producing – the key is whether the property is capable of producing income.
I&E statements must be filled out completely; there are no shortcuts. Incomplete requests are deemed evasive as intending to defeat the law's goal of gathering information for use by the assessor to establish the correct assessment for a property. They must also be filed with the assessor within 45 days of mailing.
Opportunities to reduce real property taxes should not be overlooked in New Jersey with its high real estate taxes. While the deadline for filing a standard tax appeal to challenge next year's assessment is April 1, 2014, please note that there are other deadlines throughout the calendar year for other types of appeals.
Assessors are sending their Chapter 91 requests now. In a way, they are setting traps now for inattentive taxpayers who may lose out on a strong appeal if the request is ignored. Failure to file an I&E statement will invariably result in a dismissal of a tax appeal petition or complaint as assessors use Chapter 91 noncompliance as a tool in defending tax appeals. Accordingly, be on the alert for the assessor's Chapter 91 request. Even if responses to an I&E statement were not filed in previous years, filing a response this year may pave the way for prospective tax relief by appeal or negotiation in a future year.
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