On appeal from Tax Court of New Jersey whose decision is reported at 10 N.J. Tax 412.
Baime and A.m. Stein. The opinion of the court was delivered by Baime, J.A.D.
The Farmland Assessment Act of 1964 (N.J.S.A. 54:4-23.1 to -23.23) provides preferential tax treatment to land devoted to agricultural or horticultural use. N.J.S.A. 54:4-23.2. In order to qualify, the owner must establish that (1) the property consists of at least five acres, and (2) he derives a minimum average income of $500 for the first five acres and $.50 for each additional acre during the two years immediately preceding the tax year in issue. N.J.S.A. 54:4-23.2; N.J.S.A. 54:4-23.5. At issue here is whether income derived from the agricultural use of two contiguous parcels owned by separate corporate entities can be aggregated for the purpose of obtaining the benefit of farmland assessment. Also in question is whether land used in violation of the local zoning ordinance can qualify for farmland assessment.
This case is the sequel to Byram Tp. v. Western World, Inc., 111 N.J. 222, 544 A.2d 37 (1988). There, our Supreme Court held on the basis of the record before it that the woodland property of Cheyenne Corporation and Western World, Inc. was entitled to farmland assessment for the tax year 1983. This appeal pertains to tax years 1985 through 1989.
The facts are not in dispute. The taxpayers are related, but separate and independent, corporations. Although Michael Stabile, Sr., and his wife, Mary, are the principals of both companies,
each corporation maintains separate records, books, and receipts. The property owned by Cheyenne Corporation consists of approximately 94 acres. Of that total acreage, 19 acres are operated as a family amusement park, which is not assessed as farmlands and is not an issue here. The tax status of the remaining 75 acres of woodlands is in dispute. The rest of the property, some 48 acres of woodlands, is owned by Western World, Inc. Cheyenne purchased its parcel in 1964. In 1980, Western World purchased the contiguous tract.
The taxpayers unsuccessfully applied to Byram Township for farmland assessment in each of the tax years from 1985 through 1989. The Sussex County Board of Taxation affirmed the Township's determination. The taxpayers filed complaints with the Tax Court, which were consolidated for the purpose of trial. In a reported opinion, the Tax Court granted the taxpayers' pretrial motion to exclude evidence that farming was not a permitted use under the Township's zoning ordinance. Cheyenne Corp. v. Byram Tp., 10 N.J. Tax. 412 (Tax Ct.1989). In barring the Township from presenting this evidence, the court reasoned that "lawful use [of property] is not a requirement for farmland assessment qualification." Id. at 416. Following a trial, the court entered a judgment granting the taxpayers farmland assessment for each of the tax years in question. In its letter opinion, the court assumed that the income separately derived by each corporation was insufficient to satisfy the statutory requirement. The court nevertheless held that separate legal ownership does not preclude aggregating acreage and income to meet the requirements of farmland assessment.
We hold that amounts earned from the agricultural use of contiguous tracts of land owned individually by different corporate entities cannot be combined to satisfy the minimum average income requirement contained in the statutory scheme. In reaching this conclusion, we stress the fundamental principle
that ordinarily all property must bear its just and equal share of the public burden of taxation. Princeton Univ. Press v. Princeton, 35 N.J. 209, 214, 172 A.2d 420 (1961). Statutes granting exemption from taxation represent a departure from this rule. Ibid. Historically, our courts have resolved all doubts against those seeking the benefit of a statutory exemption. See, e.g., Cosmair, Inc. v. Director, N.J. Div. of Taxation, 109 N.J. 562, 569-570, 538 A.2d 788 (1988); Fairlawn Shopper, Inc. v. Director, Div. of Taxation, 98 N.J. 64, 73, 484 A.2d 659 (1984); Fedders Financial Corp. v. Director, Div. of Taxation, 96 N.J. 376, 386, 476 A.2d 741 (1984); Boys' Club of Clifton, Inc. v. Jefferson ...