On appeal from the Tax Court of New Jersey, Docket No. 000201-2005 (in A-2843-05T5) and Docket No. 005494-2004 (in A-3036-05T2), whose opinion is published at 22 N.J. Tax 568 (Tax Ct. 2005).
The opinion of the court was delivered by: Skillman, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Lisa and Holston, Jr.
The New Jersey Constitution and implementing statutes grant a deduction from real estate taxation to veterans who were in "active service in time of war" and an exemption from real estate taxation to veterans who suffered a total and permanent disability as a result of such service. Since these provisions were first adopted, the Director of the Division of Taxation has construed the term "active service" to exclude service solely for training in the National Guard or Reserves. We conclude that the Director's long-standing construction of the veterans' tax deduction and exemption is not plainly unreasonable, and therefore, the courts should defer to this construction.
The homeowners who seek the deduction and exemption from real estate taxation available to veterans who have rendered "active service in time of war" both went through military training during the Vietnam War but were not called for active duty.
Defendant Winfield Buchanan enlisted in the Air Force Reserve on October 18, 1972. Buchanan engaged in basic training from October 20, 1972 to February 16, 1973. He subsequently engaged in additional training from August 4 to August 18, 1973, and August 10 to August 24, 1974, but he was never called for active duty. Buchanan was honorably discharged on October 17, 1978.
Buchanan and his wife own a home in Lambertville that they occupy as their primary residence. Lambertville granted the Buchanans' application for a veteran's tax deduction, and they received the benefit of this deduction for the 2000, 2001, 2002 and 2003 tax years.
As a result of an audit by the Director of the Division of Taxation,*fn1 it was determined that the Buchanans are not eligible for the deduction because Mr. Buchanan's only military service was for training purposes. Accordingly, Lambertville disallowed the deduction for the 2004 tax year and demanded reimbursement for the deductions erroneously allowed in the preceding four years.
The Buchanans appealed to the Hunterdon County Board of Taxation, which determined that the Buchanans are entitled to the veterans' deduction. The Director subsequently filed a complaint in the Tax Court challenging this determination.
Defendant Frank Scuorzo enlisted in the Army National Guard in July 1969 and was ordered to report for twenty-five weeks of training beginning in November 1969. Scuorzo sustained several injuries during training, including hearing loss, which resulted in hospitalization and an interruption in the training period. Based on his injuries, Scuorzo received an honorable discharge without being called for active duty.
Scuorzo and his wife own a home in Dover Township that they occupy as their primary residence. In 2004, after his hearing loss was certified by the United States Department of Veterans Affairs to be a 100% permanent and total service-connected disability, Scuorzo applied to Dover for the exemption from real estate taxation available to veterans disabled during "active service in time of war." The municipal tax assessor denied this exemption on the ground that "active duty for training" does not qualify as "active service in time of war."
The Scuorzos appealed to the Ocean County Board of Taxation, which reversed the tax assessor and determined that the Scuorzos are entitled to the disabled veterans' exemption from real estate taxation. Dover subsequently filed a complaint in the Tax Court challenging this determination.
The Buchanan case was brought before the Tax Court by the Director's motion for summary judgment. The Scuorzo case was the subject of a one-day trial. Although the Tax Court did not consolidate the cases, it ...