Gaulkin, Sullivan and Foley. The opinion of the court was delivered by Gaulkin, J.A.D.
This is an appeal from the judgment of the Division of Tax Appeals in the Department of the Treasury of the State of New Jersey (hereinafter referred to as the "Division") wherein the table of equalized valuations for the Town of Kearny promulgated by the Director of the Division of Taxation on October 1, 1959 to be used in the calculation and apportionment of distributions of State School Aid to municipalities for the fiscal year of 1960-61 was corrected by fixing and establishing the average ratio of assessed to true value of real property in Kearny at 34.81% instead of at 46.31%, the ratio for which the Town of Kearny contends.
The facts are not in dispute. The method used by the Director of the Division of Taxation in establishing the average ratio in each municipality is by the study of sales transactions over a two-year period, ascertaining their aggregate sales prices and their aggregate assessed valuations and then calculating the ratio between the two figures. The technique of the development of said table is stipulated to be as set forth in City of Bayonne v. Division of Tax Appeals , 49 N.J. Super. 230, 233-235 (App. Div. 1958).
The Town of Kearny predicates its appeal upon the refusal of the Director (which refusal the Division upheld) to use three sales transactions in determining the assessment ratio and equalized valuation for said taxing district. The Director contends that the sales are non-usable because they fall into category No. 6 of the 27 categories of non-usable deed transactions, which categories he has established in determining assessment sales ratios. Said category No. 6 reads as follows:
"Sales of property conveying only a portion of the assessed unit, usually referred to as apportionments, split-offs or cut-offs; for example, a parcel sold out of a larger tract where the assessment is for the larger tract."
Two of the three disputed sales were conveyances made by the E.I. du Pont de Nemours & Co. (hereinafter called
"du Pont") of all its real estate in the Town of Kearny. The third sale was by Congoleum-Nairn Inc. of three of its assessed units.
The real estate owned by du Pont consisted of 25 separately assessed units. The total assessed value of these units for 1958 was $1,372,350, being $209,200 for land and $1,163,150 for improvements. Du Pont offered all its real estate for sale because it was removing its operation from Kearny and did, in fact, sell all in these two sales. The first sale, consisting of a strip of vacant land approximating 11 acres, was made on August 11, 1958, to Carla Holding Company, Inc. for $9,500 (as calculated from the revenue stamps) and the second sale, consisting of all the remaining land and improvements, was made on September 26, 1958 to Wasco Chemical Co. Inc. for $400,000. The sale of the 11 acres to Carla Holding Co. Inc. involved only portions of three assessed units and amounted to about two-thirds of said three units. The remaining portions of the three units, plus the other 22 assessed units, were included in the sale to the Wasco Chemical Co. Inc.
The total assessed value of the three units (out of which came the parcel sold to Carla) involved in the first sale was $25,850, of which $24,950 was the land assessment and $900 was the improvement assessment. These three units represented less than 2% of the total assessment of all 25 units and the portion sold to Carla Holding Co. Inc. represented about 1% of that total.
On January 15, 1959 Congoleum-Nairn Inc. conveyed three of its assessed units to Kearnyland Inc. for $800,000. The total assessed value of these units was $471,950.
On December 15, 1958 Congoleum-Nairn Inc. had filed an application for a subdivision of two of its assessed units. The subdivision was approved on December 18, 1958 and one of the newly created units, consisting of 1.857 acres of vacant land, became Block 21 Lots 9C and 9AC with an assessment of $20,450. This is the ...