Goldmann, Leonard and Mountain.
In these consolidated actions appellants challenge the constitutionality of N.J.S.A. 54:11D-7, originally enacted as part of L. 1966, c. 135, one of a related group of six acts (L. 1966, c. 133 to 138 inclusive), reforming and revising the business tax laws of New Jersey. It was thereafter amended by L. 1967, c. 50 and L. 1968, c. 104.
We affirm substantially for the reasons expressed by Judge Simpson in his opinion reported in 108 N.J. Super. 284 (Law Div. 1970).
The several related statutes passed in 1966, as presently amended, mark the culmination of a long legislative endeavor to achieve an effective and fair method for the taxation of personal property used in business. Much of the earlier history of this effort has been recounted in prior decisions. These include Passaic v. Passaic Co. Bd. of Taxation , 31 N.J. 413 (1960); Switz v. Kingsley , 37 N.J. 566 (1962); Thomas v. Kingsley , 85 N.J. Super. 357 (Law Div.
In brief, the 1966 legislation deprived municipalities of the power to tax tangible personal property used in business while at the same time imposing new and increased state taxes on business and business assets. It further provided for the distribution of revenues received from this source among municipalities 'in replacement of the revenues [formerly] derived by such municipalities from the local taxation of personal property used in business." N.J.S.A. 54:11D-1.
The particular statute which is here challenged, N.J.S.A. 54:11D-7, has nothing to do with the assessment or collection of taxes. It is concerned simply with providing a formula whereby a county board of taxation may arrive at a figure approximating a capitalization of the replacement revenue received by a particular municipality and then employ that figure, together with the equalized assessed value of real estate, in determining "total valuation" for purposes of apportioning the cost of county government and regional and consolidated school district requirements pursuant to N.J.S.A. 54:4-49 to 51.
As is well known, certain county and regional and consolidated school district needs are met from local taxes. N.J.S.A. 54:4-39 to 41. The procedure designed to accomplish this purpose is supervised by county boards of taxation, which first equalize the assessed values of all real property among the respective taxing districts, N.J.S.A. 54:3-17 to 19; 54:4-47. Then, pursuant to N.J.S.A. 54:11D-7, "the assumed assessed value of the property represented by the money received by each taxing district" is determined and then equalized in the same manner that real estate assessments are equalized. Finally, based upon these equalized assessments, the burden is apportioned among the several districts, N.J.S.A. 54:4-49 to 51.
Initially appellants invoke Article VIII, § I, par. 1 of the New Jersey Constitution of 1947 which reads,
Property shall be assessed for taxation under general laws and by uniform rules. All real property assessed and taxed locally or by the State for allotment and payment to taxing districts shall be assessed according to the same standard of value; and such real property shall be taxed at the general tax rate of the taxing district in which the property is situated, for the use of such taxing district.
As noted above the only statute attacked in this action is N.J.S.A. 54:11D-7 and it has nothing to do with assessing taxes. Hence this constitutional provision is inapplicable. Furthermore, with the exception of the first sentence, the provision is concerned only with the taxation of real ...