The opinion of the court was delivered by: Dougherty
Leonard Van Wingerden (Taxpayer) appeals from judgments of the Sussex County Board of Taxation, affirming Lafayette Township's (the Township) assessments of Block 5, Lot 7.03 for tax years 1993 and 1994. The Township asserts the exemption in N.J.S.A. 54:4-23.12 violates N.J. Const. art. VIII, § 1, par.1(a). *fn1 The Attorney General, Deborah T. Poritz, intervenes (R. 4:28-4(d)) to defend the statute on behalf of the State of New Jersey.
The pivotal issue is whether Taxpayer's greenhouse is real property which must, by Constitutional mandate, be subject to taxation under N.J.S.A. 54:4-1 or, whether it is personal property which may be classified as nontaxable under N.J.S.A. 54:4-23.12. This issue was advanced only in the 1994 matter. *fn2 For the reasons which follow, it is held: (1) the greenhouse is "real property"; (2) it is subject to taxation as "real property taxable" under N.J.S.A. 54:4-1; (3) N.J.S.A. 54:4-23.12 applies to exempt it from that tax; and (4) that exemption is void because it confers a private benefit, a preference, and is an impermissible classification of real property. N.J. Const. art. VIII, § 1, par.1(a).
For both Tax Years 1993 and 1994 Taxpayer also seeks a determination of a "reasonable depreciation deduction". True value, Taxpayer contends, equals cost to construct the greenhouse, minus the depreciation deduction. Taxpayer concludes true value under this approach will require an assessment reduction in both years. Taxpayer fails, however, to offer evidence sufficient to overcome the presumption of correctness which attaches to the original assessments. The assessments must, then, be affirmed.
Block 5, Lot 7.03 is a 22 acre parcel, improved with a personal residence and a greenhouse used in Taxpayer's business. For Tax Years 1993 and 1994 the property was assessed:
The parties stipulate to the following allocation of the assessment:
Taxpayer challenges only that portion of the assessment, allocated to the greenhouse - $582,000.
In 1988 Taxpayer opened a horticultural business, which he conducts as a sole proprietorship. The business consists of the cultivation of cut flowers, roses and anthurium, for sale at wholesale. The flower business is conducted year round. In New Jersey this requires a greenhouse. Taxpayer's greenhouse is glass, covering approximately an acre and a half of land.
Taxpayer purchased the greenhouse (sometimes herein referred to as a "house") from the catalogue of V. & V. Noordland, Inc. Noordland is a major supplier in the industry of "Dutch" houses. The Dutch house is far different in design from the traditional "American Widespan" greenhouse. The Widespan is built on heavy foundations and walls. Its glass panels are welded together. Its roof has a single peak, and is supported by a heavy interior structure of trusses and beams. As the ground area covered by the Widespan expands, the height of the roof must rise. The higher the roof the greater the structure necessary to support and distribute its weight, and the weight of the glass paneled walls.
The Dutch style house is prefabricated in Holland in modular units ("houses"). Houses may be purchased in several different widths. The most common width (and that chosen by Taxpayer) is twenty-one feet. The roof of each house is low and has twin peaks. A drainage gutter lies between the peaks. Steel columns, evenly spaced throughout the interior as well as around the perimeter permit the weight of the structure to be evenly distributed throughout, rather than shifted to the perimeter walls alone as occurs with the American Widespan.
Under the Dutch design, houses may be connected to form any overall dimension as may be required by a grower. Houses are connected by sharing a gutter between their peaks. The connection is made on site, by nuts and bolts. The assemblage of multiple houses to cover a greater ground area, requires no greater roof height than for a single house. Each Dutch house is still self supported by its evenly spaced steel columns. The glass panels, which form the roof and walls of the Dutch house, slide into metal channels where they are held in place by a bead of caulking material. The channels are bolted to each other and to the steel columns and interior trusses. Unlike the American house, there is no welding or caulking. The galvanized steel columns which support the structure of the Dutch house are attached by anchor bolts to concrete piers sunk into the earth. Greenhouses as large in area as thirteen acres and as small as 4000 square feet have been sold and assembled by V. & V. Noordland, Inc. Taxpayer's consists of sixteen houses, covering an area in excess of 66,000 square feet.
Taxpayer's sixteen houses are configured to form a "main greenhouse", measuring 315 feet 8 inches wide and 207 feet 6 inches long and a separate "shipping house", 21 feet wide and 69 feet 9 inches long. These modular units were shipped in pieces to the subject property and assembled there by a specially trained work crew.
A concrete aisle, 8 feet wide, is the only flooring installed in the main house. The aisle runs down the center of the house. The bare land is exposed, on each side of it. Taxpayer's roses and anthurium are planted directly in the soil, in beds approximately 3 feet 6 inches wide, set perpendicular to the aisle.
Each individual plant is watered and fed by a tube which drips at intervals set by Taxpayer. The computerized controls for this irrigation system are located on a centralized panel in the shipping house. In addition to the drip tubes, 2 inch thin wall steel conduit tubing, set on stanchions 4 inches off the ground, runs along both sides of each bed. Warm water is run through this tubing, producing radiant moist heat. Some heat tubing is also installed above the plants, hanging from the overhead trusses. The computerized controls for the heating system are located on the centralized panel in the shipping house. The hot water boilers and a pump to distribute the water through the heating system are also installed there.
A fabric curtain (the "heat shield") runs across the top of the main greenhouse. The heat shield, installed under the roof, hangs approximately 12 inches under each gutter. It sits above the heating system. The shield can be adjusted to insulate against ...