On appeal from the Tax Court of New Jersey, whose decision is reported at N.J. Tax (Tax 1993).
Before Judges Muir, Jr. and Thomas.
The opinion of the court was delivered by
Appellant New Jersey Transit Corporation (Transit), appeals from a Tax Court Judge's sua sponte order which dismissed Transit's property tax appeal brought against the Borough of Somerville (the Borough). The Tax Court Judge held that N.J.S.A. 2A:14-1.2, which establishes a ten year limitation period for actions commenced by the State and its agencies, does not apply to property tax appeals. As a result, the court concluded that N.J.S.A. 54:3-21, the statute which establishes the deadline for filing petitions of appeal to county boards of taxation applied and thus the appeals for tax years 1981 through 1990 were time-barred. It is Transit's position that the ten year statute does not contain language which exempts its application to property tax appeals and that its appeals of tax assessments dating back to 1981 are not time-barred.
Transit also contends the Tax Court Judge failed to consider a federal statute, 45 U.S.C.A. § 581 (c)(5), which serves to exempt Transit's property from State and local taxation. Transit therefore contends, in the alternative, that even if N.J.S.A. 2A:14-1.2, the ten year statute of limitations, does not apply to property tax appeals, the federal statute preempts any state statute that would otherwise serve as a bar to Transit's appeals.
The subject property consists of an embankment that supports the elevated Raritan Valley rail line which is owned and operated by Transit as a commuter rail line. This rail line was formerly owned by the bankrupt Central Railroad of New Jersey, and was transferred to Conrail in 1976 pursuant to federal rail reorganization legislation. In 1978, the property was acquired, together with
the remaining Raritan Valley line, by the State of New Jersey from Conrail. Upon the establishment of New Jersey Transit in 1979, the ownership of the property was vested in Transit. N.J.S.A. 27:25-21.
On July 16, 1990, the Borough sent Transit a letter indicating that outstanding taxes were due for the years 1981 to 1990. This was followed by a bill for 1990 and a partial bill for 1991.
Transit filed an appeal with the Somerset County Tax Board for tax years 1981 to 1991 urging it was tax exempt. The county tax board, however, sustained the assessments.
Transit appealed the county tax board's decisions to the Tax Court. There, Transit argued that N.J.S.A. 2A:14-1.2 gave it a ten-year period within which to appeal the local tax assessments and that 45 U.S.C.A. § 581(c)(5) gave it a retroactive tax exemption to October 1, 1981.
Without reaching the merits of the case, the Tax Court held, in a written decision, that the ten year statute of limitation, N.J.S.A. 2A:14-1.2, is inapplicable to the filing of tax appeals and, therefore, the assessments for 1981 to 1990 would stand because they were not appealed within time. The Tax Court granted the ...