On appeal from the Tax Court of New Jersey, Docket Numbers 4473-2001 (Eatontown) and 4022-2001 (Lakewood).
Before Judges Havey, Fall and Parrillo.
The opinion of the court was delivered by: Havey, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
These are back-to-back appeals, consolidated for the purpose of this opinion. The central issue is whether the State of New Jersey was required to file a timely appeal pursuant to N.J.S.A. 54:4-63.11 challenging added and added/omitted assessments issued by the defendant municipalities on state-owned, motor vehicles inspection stations, occupied and operated by a private, for-profit entity. Judge Small, in the Tax Court, concluded that the State's failure to file timely appeals barred its challenge to the assessments. We agree, and affirm the summary judgment orders dismissing the State's appeals challenging the assessments issued by the Township of Lakewood and Borough of Eatontown for the tax years 1999 and 2000. On Lakewood's cross-appeal, we affirm the summary judgment order declaring that the properties were tax exempt for tax years 2001 and 2002.
On or prior to the tax year 2000, the State entered into written agreements with Parsons Infrastructure & Technology Group, Inc. (Parsons), whereby Parsons agreed to operate Division of Motor Vehicles inspection stations situate on the state-owned properties in Lakewood and Eatontown. As a result, the municipalities revoked the tax-exempt status of the properties. On July 24, 2000, Lakewood issued to the State and Parsons a six-month added assessment for the tax year 2000. Likewise, in September 2000, Eatontown issued an added/omitted assessment on the State's Eatontown property for the tax years 1999 and 2000. On March 29, 2001, the State filed simultaneous appeals with the Ocean and Monmouth County Boards of Taxation challenging the assessments. In June 2001, both Boards denied the State's appeals.
On August 13, 2001, the State filed appeals with the TaX Court. It challenged the Board's denial of exemptions for: (1) the added assessment issued by Lakewood for 2000 and Lakewood's regular assessment for 2001; and (2) Eatontown's added/omitted assessment for the years 1999 and 2000, and its assessment for 2001. The State also filed direct tax appeals with the Tax Court challenging the assessments for the tax year 2002.
The parties filed cross-motions for summary judgment. The State argued that the subject properties were exempt from taxation under N.J.S.A. 54:4-3.3 as state-owned properties. The Tax Court agreed, and granted summary judgment in favor of the State as to the 2001 and 2002 assessments, since the State's appeals challenging the assessments for these tax years were timely. However, by separate order, the court dismissed the State's appeals challenging the 1999-2000 assessments because the State failed to file timely appeals in accordance with N.J.S.A. 54:4-63.11, which governs appeals from added assessments.*fn1 By doing so, the court rejected the State's argument that, because the assessments were ultra vires, the court should declare them void under the Uniform Declaratory Judgments Act (Act), N.J.S.A. 2A:16-50 to -62, despite the statutory bar. The State now appeals from that order. Lakewood cross-appeals, claiming that the Tax Court erred in determining that the state-owned property was tax exempt as to tax years 2001 and 2002.
We first address Lakewood's cross-appeal.
N.J.S.A. 54:4-3.3 provides in pertinent part that"[e]xcept as otherwise provided by article 1 of this chapter (§ 54:4-1 et seq.), the property of the State of New Jersey... shall be exempt from taxation under this chapter...." Judge Small concluded that because this section conditions exemption from taxation only upon state ownership of the property, and not the nature of the property's use, the property enjoys tax exemption status despite Parsons' profit-driven use. We agree with the Tax Court's analysis in its entirety.
In doing so, we acknowledge Lakewood's argument, joined by Eatontown, that N.J.S.A. 54:4-3.3 is not unconditional. It provides for tax-exempt status"[e]xcept as otherwise provided by article 1 of this chapter...." Two article 1 provisions are pertinent here. The first, known as the Leasehold Taxing Act, N.J.S.A. 54:4-2.3, provides:
When real estate exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the real estate taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his assignee, and assessed as real estate.
The municipalities argue that this statute applies because the written contract between the State and ...