Goldmann, Foley and Collester. The opinion of the court was delivered by Collester, J.A.D.
This is an appeal by the Township of East Windsor (township) from a judgment of the Division of Tax Appeals (Division) which affirmed the 1964 equalization table adopted by the Mercer County Board of Taxation (county board).
In establishing its 1964 table of equalization the county board computed the ratio of assessed to true value of real property in the township at 40.65%. The county board used as a base for its table the ratio of assessed to true value of real property promulgated by the Director of the Division of Taxation (Director) on October 1, 1963 for use in connection with the distribution of school aid to municipalities.
The township's primary ground of appeal is that the Division erred in holding that it could not revise the Director's table, adopted by the county board as its own, even though the table was computed by inclusion of a sale (hereinafter referred to as the Milford Farms sale), which should not have been used under the categories of unusable sales established by the Director himself.
The facts are not in dispute. On July 3, 1961 Milford Farms, a partnership, contracted to sell a tract of land in East Windsor, then zoned for farm use, to Jayeff Holding Corporation for $165,144. The assessed value of the land was
$10,800. The contract provided that the purchaser would not be obligated to consummate the transaction unless the zoning ordinance was amended to permit use of the land for commercial and light manufacturing purposes. The zoning ordinance was so amended on November 6, 1961, and the property conveyed by deed dated November 22, 1961.
On October 1, 1962 the Director promulgated his table of equalized valuations for use in the calculation and apportionment of state aid to local schools for the school fiscal year 1963-1964. In preparing the table the Director used the Milford Farms sale as a sample sale of Class 3 property, i.e., farm property. The township did not challenge the table as permitted by N.J.S.A. 54:1-35.4. In March 1963 the county board established its 1963 table of equalization for the purpose of apportioning the county tax burden among the municipalities of the county. N.J.S.A. 54:3-17. In the discharge of that task the county board, as a matter of course, adopted the ratio of assessed to true value of real property in East Windsor, as it appeared in the Director's table. The township did not appeal under N.J.S.A. 54:2-37.
On October 1, 1963 the Director promulgated his school aid table for the school fiscal year 1964-1965. In establishing his ratio of assessed to true value of East Windsor real property, the Director used sales studies based on sales in East Windsor for two years previous to June 30, 1963. The Milford Farms sale, classified as farm property, was included as a "prior year" sale (as distinguished from a "current year" sale). The township appealed to the Division from the Director's table but did not challenge the inclusion of the Milford Farms sale. The appeal, based on the inclusion by the Director of several current year sales, was terminated by a stipulation between the township and the Director which was incorporated in a judgment entered by the Division on December 12, 1963 which caused the assigned ratio for East Windsor to be increased by .01%.
In 1963 the township completed a revaluation of its real property. The appraised values resulting therefrom were included
in the assessment lists at 50% of true value for the tax year 1964. In preparation of its 1964 equalization table the county board took into account this revaluation. Having adopted the Director's 1963 table of equalized values as its own, it adjusted the ratio under an approved formula for determining the new average ratio for revalued and reassessed municipalities. The county board's preliminary table of equalization was issued pursuant to N.J.S.A. 54:3-17, and a ratio of 35.73% of assessed to true value was assigned to East Windsor. The township took exception to the preliminary table, contending that its revaluation of real property gave a more accurate picture of the aggregate true value than that arrived at by use of the Director's sales study ratio, and that the Director's two-year sales study contained sales which should not have been included. However, the township did not challenge the use of the Milford Farms sale as a prior year sale in the Director's computations. Following a hearing the county board revised its table to compensate for the mathematical errors of the assessor, denied the township's claims, and adopted its final equalization table assigning a ratio for East Windsor of 40.65%. The township appealed to the Division.
The Division's stated reason for refusing to revise and correct the 1964 county table by elimination of the Milford Farms sale was that the township had not challenged the use of the sale when the county board promulgated its 1963 table of equalization. It held that under the decision rendered in City of Bayonne v. Division of Tax Appeals, 49 N.J. Super. 230 (App. Div. 1958), sales which were used in the ...