Goldmann, Foley and Collester. The opinion of the court was delivered by Goldmann, S.j.a.d.
Plaintiffs brought an action in the Law Division to have chapters 140 and 141 of the Laws of 1964 declared unconstitutional and to require defendants to desist from enforcing them. Following answer and the filing of cross-motions for summary judgment, the Law Division judge denied plaintiffs' motion and dismissed the complaint. This appeal followed.
The statutes in question amend L. 1960, c. 51, whose constitutionality was upheld, generally, in Switz v. Kingsley, 37 N.J. 566 (1962). The constitutionality of L. 1964, c. 141, was unsuccessfully challenged in Thomas v. Kingsley, 85 N.J. Super. 357 (Law Div. 1964), affirmed 43 N.J. 524
(1965). We note that the present action was instituted shortly after the filing of the complaint in Thomas, and decided a week after the Law Division's decision in that case.
It is unnecessary to review again the tax background which led to the enactment of chapter 51 and its amendments, or the specific provisions and application of that legislation. These are fully discussed in the cited decisions.
It should first be observed that any attack on chapter 140 of the Laws of 1964 appears to be somewhat belated. Chapter 140 is exactly the same as section 5 of chapter 51 of the Laws of 1960 (N.J.S.A. 54:4-2.29), the validity of which act, as we have said, was sustained in Switz. Plaintiffs' principal objection to chapter 140 appears to be that the "fair value" of tangible personal property used in business is "presumed to be the net book value thereof as shown by the books and records of the person assessed." They contend that this permits the person assessed to determine the value of such property without affording any review to others who might be affected, namely, the remaining taxpayers of the district. It is alleged that the act sets up an "insubstantial and illusory class" by arbitrarily, and in disregard of the constitutional mandate of equality, giving the privilege of self-assessment to owners of tangible personal property used in business, while denying that privilege to owners of other kinds of property.
This latter claim is easily met. Art. VIII, Sec. I, par. 1 of the 1947 State Constitution left in the Legislature a broad power to classify personal property for either exemption or preferential treatment, and such classification must be upheld if any set of facts can reasonably be conceived to support it. Switz v. Kingsley, above, 37 N.J., at pages 585, 586; Thomas v. Kingsley, above, 43 N.J., at page 530.
The so-called self-assessing feature of chapter 140 does not make the taxpayers' book entries conclusive. "Fair value" is still to be determined by the assessor, subject to uniform rules and regulations promulgated by the Director of the
Division of Taxation. Such rules and regulations have been keyed to the federal income tax returns of the taxpayer, and this approach is reflected by Regulation 16:12-2.140, promulgated by the Director and defining net book value with respect to tangible personal property used in business. But in any case, it is the assessor of the taxing district who has the final word as to valuation. N.J.S.A. 54:4-12.
As defendants note, the use of "net book value" makes possible a practical administration of our revenue laws. The use by both the state and federal taxing systems of this common base results not only in administrative convenience for both taxpayer and government, but would seem to insure honesty in accounting by having two levels of government concerned with the proper recordation of tax data. See N.J.S.A. 54:52-4, penalizing any person who willfully sets up, keeps or maintains any false or fraudulent books, records or accounts relating to any business or transaction subject to, affected by, or employed in the measurement or computation of any tax imposed by any law of this State.
In attacking the validity of chapter 141 of the Laws of 1964, plaintiffs first claim that section 3 (N.J.S.A. 54:4-11), dividing tangible personal property used in business into three classes, assessed at different levels, is unconstitutional. Their contention is that it sets up insubstantial and illusory classifications of property for either total or partial exemption. The matter is settled by what the Supreme Court said in the Switz and Thomas cases. The only part of chapter 141 not passed upon in Thomas is the provision now appearing in section 3(a) (N.J.S.A. 54:4-11(a)), which reduces to 65% of the common level the percentage level of the fair value for tax purposes of machinery, implements, equipment and all other personal ...