On appeal from the Tax Court of New Jersey.
Petrella, Gaynor and Scalera. The opinion of the court was delivered by Petrella, P.J.A.D.
[216 NJSuper Page 486] The Township of Little Falls (Township) appeals from the judgment of the Tax Court which held void and invalid an increase in the tax assessment of a cooperative apartment complex owned by Inwood Owners, Inc. (Inwood). On or about November 1, 1985 the tax assessor attempted to increase Inwood's assessment by imposing omitted assessments for the tax years 1984 and 1985, evidentially based on the fact that the apartment complex had been converted to a cooperative status.
The claimed omitted assessment was apparently based on the recited consideration in a July 17, 1984 deed by Inwood at Great Notch, a partnership, to Inwood Sponsor Corp. which was Inwood's predecessor in title.*fn1
The municipal tax assessor had utilized the alternate method of imposing an omitted assessment under N.J.S.A. 54:4-63.31 for the 1984 and 1985 tax years in the amount of $4,706,400. The assessor had bills issued for the omitted assessments for both years on or about November 1, 1985, with payment due that date. The bills also recited that appeals to the County Board of Taxation (County Board) could be taken on or before December 1. This resulted in an omitted gross tax of $272,029.92 for 1984 and $276,736.32 for 1985 attributable to the conversion of the property from unified single ownership to cooperative ownership. No improvements or changes had been made to the physical property.
The Township contends that (1) the Tax Court lacked jurisdiction because Inwood failed to pay the omitted assessment due November 1, 1985 prior to filing its tax appeals; (2) the Tax Court erred in holding that the municipality had no authority to impose the additional tax under the omitted assessment procedures; (3) the Tax Court lacked jurisdiction as to the 1984 omitted assessment because there was no judgment for that assessment by the County Board, and (4) the Tax Court lacked jurisdiction as to the 1985 omitted assessment because the complaint was filed prior to the entry of a judgment by the County Board.
Judge Kahn in a comprehensive and thorough letter opinion in the Tax Court rejected the Township's arguments and held that the requirement to pay current taxes was not applicable to an appeal of an omitted assessment; the mere fact of the
conversion of the subject property, without more, was not a proper basis for imposition of an omitted assessment, and inaction by the County Board regarding the 1984 tax year was a judgment within the purview of N.J.S.A. 54:4-63.39.
We turn first to the Township's argument that plaintiff should be barred from contesting the omitted assessment because N.J.S.A. 54:51A-1b requires that all taxes for the year for which review is sought must be paid by the time a complaint is filed with the Tax Court. That statute provides in pertinent part:
b. At the time that a complaint has been filed with the tax court seeking review of judgment of county tax boards, all taxes or any installments thereof then due and payable for the year for which review is sought must have been paid. No interest shall be due and payable by the appellant for the period from November 1 of the current tax year to the date of filing the complaint.
Defendant maintains that a jurisdictional prerequisite to consideration of any tax appeal from the decision of a County Board by the Tax Court is the payment of taxes. Its argument relies principally on Schneider v. City of East Orange, 196 N.J. Super. 587 (App.Div.1984), aff'd 103 N.J. 115 (1986), cert. den. U.S. , 107 S. Ct. 97, 93 L. Ed. 2d 48 (1986) (complaint filed November 13, 1979 dismissed because balance of taxes not paid until December 16, 1979); Woodlake Heights Homeowners Ass'n v. Middletown Twp., 7 N.J. Tax. 364, 368 (App.Div.1984) (complaint dismissed because fourth quarter taxes were due and payable before the complaint was filed); Stewart v. Hamilton Twp., 7 N.J. Tax. 368, 372-373 (Tax Ct.1985). However, the cases relied on for defendant's argument specifically address the payment of taxes due on the original assessment for the tax year.
N.J.S.A. 54:4-63.39 speaks to appeals from omitted assessments:
Appeals from assessor's omitted assessments shall be made to the county board of taxation on or before December 1 of the year of levy and the county board shall hear all such appeals ...