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City of Bayonne v. International Nickel Co.

Decided: December 13, 1968.

CITY OF BAYONNE, DEFENDANT-APPELLANT,
v.
INTERNATIONAL NICKEL CO., INC., PLAINTIFF-RESPONDENT



Conford, Kilkenny and Leonard. The opinion of the court was delivered by Conford, S.j.a.d.

Conford

The City of Bayonne appeals the cancellation by the Division of Tax Appeals of a personal property tax levied by its assessor for the tax year 1965 on personal property of International Nickel Co. The taxpayer possessed taxable personal property, used in its business, in the Bayonne taxing district on January 1, 1964, the assessing date for 1965 taxes, N.J.S.A. 54:4-11 (as amended by L. 1964, c. 141), but removed all of it from this State to the States of New York and West Virginia during the year 1964, so that none of it was in Bayonne on January 1, 1965 or thereafter.

The action of the Division was predicated on the theory that N.J.S.A. 54:4-1, providing for taxation of real and personal property "within the jurisdiction of this State," precluded the assessment for 1965 by a New Jersey taxing district of personal property which was physically beyond the borders of the State before the calendar year 1965 began. Bayonne contends that the status and location of the property on January 1, 1964, the statutory listing or assessing date

for the tax year 1965, controls as to Bayonne's right to impose the tax for that year. The taxpayer responds that Bayonne's construction of the tax statute would render it invalid as violative of the due process clause of the 14th Amendment to the United States Constitution.

Our careful consideration of the arguments of the parties and our independent research lead us to the firm conclusion that the taxing district's appeal must be sustained and the assessment restored. The legislative intention is that property found in the taxing district on the statutory assessing date is taxable therein for the corresponding tax year, although removed therefrom subsequent to the assessing date. Our tax statutes, as thus construed, do not offend due process even where the removal antedates the so-called tax year.

I

A review of the pertinent legislation should be preceded by the observation that beginning in 1960 there was in this State a period of intense public controversy over, and a number of legislative amendments of the law in respect of the taxation of tangible personal property, especially such as is used in business. See, e.g., Switz v. Kingsley, 37 N.J. 566 (1962); Zito v. Kingsley, 92 N.J. Super. 37 (App. Div. 1966). Detailed review of all of these enactments, several of which remained in suspension for varying periods of time, need not here be undertaken, as none of this legislation affects the basic principle we find to have characterized our tax law for decades, i.e., that the tax status of property, whether for purposes of exemption, valuation or assessing location, is fixed as of the assessing date, except where in some instances it has been specifically otherwise provided by the Legislature. See East Orange v. Palmer, 47 N.J. 307, 320-321 (1966).

N.J.S.A. 54:4-1, prior to amendment by L. 1960, c. 51, called for the taxation of "all property real and personal within the jurisdiction of this State [not expressly exempted

or excluded]" annually at its true value, and recited that "[a]ll property shall be assessed to the owner thereof with reference to the amount owned on October first in each year, and the person so assessed for personal property shall be personally liable for the taxes thereon."

N.J.S.A. 54:4-9, prior to the 1960 amendment, provided: "The tax on all tangible personal property in this State shall be assessed in and for the taxing district where the property is found."

The 1960 statute eliminated "true value" as the basis for assessment of tangible personal property and introduced a new classification of taxable personal property used in business. The assessing standard for the latter was to be "fair value," presumed to be the net book value of the property "as of the listing date." L. 1960, c. 51, §§ 4, 5. Later amendments provided for new and lower valuation bases and tax rates for assessment of various categories of tangible personalty used in business.

The assessing date for the new tax category of tangible personal property used in business was changed by L. 1960, c. 51, § 8 from the prior October 1 to the prior January 1, the act providing that January 1, 1961 "shall be the listing date with respect to taxes payable in the year 1962," and correspondingly for subsequent tax years. (For convenience we use the term "assessing date" rather than "listing date" herein.) This scheme was carried forward through the tax year 1965 and thereafter by L. 1964, c. 141, § 3 ("The taxable value shall be determined as of January 1, 1964, which shall be the listing date with respect to taxes payable in the year 1965," and correspondingly for subsequent tax years).

Insofar as concerns the place of taxation of tangible personal property used in business, the 1960 act (c. 51) retained the previous basic concept, and called for assessment thereof "at the general tax rate of the taxing district wherein such property is found, for the use of such ...


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