Swords to Plowshares

1. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Swords to Plowshares Updates on veterans' property tax benefits and farmland assessment

2. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • Reminders • P.L. 2017, c. 367 and Disabled Veteran wartime service • Direct Support v. Support • Pruent-Stevens v. Township of Toms River  • When does widowhood end? • Bentz v. Little Egg Harbor Township • Does federal law supersede state law when defining wartime service? Veterans

3. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • Alcatel-Lucent USA, Inc. v. Berkeley Heights • Chapter 91 and appealing farmland assessment denials • Audits • What the state is reviewing and what to expect Farmland

4. REMINDERS P.L. 2017, c. 367 Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • Effective January 18, 2018 • Simplify wartime service requirement for Disabled Veterans’ Exemption • Service dates only • No location or minimum days necessary

5. REMINDERS P.L. 2017, c. 367 Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • But doesn’t affect Vet Deduction • Still requires service in specific locations for 14 days for some wartime service periods

6. REMINDERS P.L. 2017, c. 367 Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • Disabled vet with two houses • Could qualify for exemption on primary residence • But not receive deduction on vacation home

7. Disabled Vet Case Law REMINDERS Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • Interpreted wartime service requirements of N.J.S.A. 54:4-8.10 • Statute applies to Deduction and Exemption • Case law would still affect Deduction questions

8. REMINDERS Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation • For Operation Enduring Freedom and Operation Northern/Southern Watch • “Area of operations” broadly worded in statute • Direct Support vs. Support • No “bright line” test • Facts & circumstances Disabled Vet Case Law

9. REMINDERS Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Disabled Vet Case Law • Direct Support • Handling chemical weapons from battlefield in San Diego (Wellington) • Treating casualties transported directly from battlefield in Maryland (Duncan) • A close link between the service and the battlefield for the conflict

10. REMINDERS Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Disabled Vet Case Law • Support • Shipping materials to unit in combat zone from Georgia (Fisher) • M.P. duty at U.S. base in Okinawa (Johnson) • Still in furtherance of the foreign mission but connection to the battlefield more removed

11. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Pruent-Stevens v. Toms River Originally decided in Tax Court in 2017 Township appealed to Appellate Division “During … widowhood” and “has not remarried” at issue

12. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Pruent-Stevens v. Toms River Plaintiff marries a veteran, remarries another after he dies After second husband dies, first posthumously granted 100% disability rating by VA

13. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Pruent-Stevens v. Toms River Toms River denied the exemption because she had remarried Tax Court found statutory terms to be “ambiguous” Held that surviving spouse cannot be married at time exemption is sought But will otherwise qualify if subsequent marriage ended

14. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Pruent-Stevens v. Toms River Appellate Division reviews de novo on a question of law Finds that the majority of dictionaries and NJ cases support Township’s position Text of Constitution and Statutes plainly supports termination of widowhood on remarriage

15. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Pruent-Stevens v. Toms River Regulations held since start of program remarriage terminates qualification AG Opinion from 1960 reinforces interpretation Argument that neither addresses end of second marriage by death unpersuasive Only annulment makes marriage void ab initio

16. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Pruent-Stevens v. Toms River Tax Court went “too far afield” to determine Legislative intent No need to go to far-flung titles in the NJ Statutes Holds that widowhood/widowerhood is terminated upon remarriage for Disabled Vets property tax exemption

17. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Bentz v. LittleEgg Harbor Plaintiff served in Navy Sees combat in Libya in 1986 Declared 100% disabled by VA in 2016 Denied exemption claim for not having active duty during prescribed wartime service periods

18. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Bentz v. LittleEgg Harbor Challenges constitutionality of wartime service periods in statute Argues federal laws override state via Supremacy Clause Denial of Equal Protection under 14th Amendment

19. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Bentz v. LittleEgg Harbor Court examines history of benefit New Jersey Constitution gives Legislature discretion to define wartime service No wars officially declared by Congress after World War II Allow for more veterans to qualify

20. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Bentz v. LittleEgg Harbor Legislature has made conscious decisions on which conflicts to include Judiciary cannot graft provisions into legislation

21. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Bentz v. LittleEgg Harbor Supremacy Clause argument Only the State can decide property tax policy Rational basis test for Equal Protection Cannot negate every possible policy reason for excluding Libya Conflict

22. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Appeal of 2016 Tax Court Decision That opinion held: As income-producing exempt properties are subject to Chapter 91 requests, so are farmland properties with income-production

23. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Alcatel-Lucent’s three arguments: Farmland assessment appeals should not be barred by failure to respond to Chapter 91 requests The wooded portion of the property should be considered separately The rule of the Tax Court undermines Chapter 91 and the Farmland Assessment Act

24. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Farmland Assessment Act is self-contained: Property tax laws are read in parimateria, all part of one statutory scheme Farmland assessment is analogous to exemption Court already held in Cascade Corp. v. Twp. of Middle that exempt properties subject to Chapter 91

25. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Farmland Assessment Act is self-contained: Farmland Assessment claims construed against claimant “If the judge created a new rule of law as Alcatel contends, it is a good one, especially apropos where a portion of the property is not subject to preferential tax treatment.”

26. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Farmland Assessment Act is self-contained: Income information necessary where the preferential status denied and full taxable value must be assessed Time and expenses wasted if the property owner does not respond to Chapter 91 request and then contests exemption or farmland assessment status

27. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Farmland Assessment Act undermined: Property owners who comply with Chapter 91 will still receive Farmland Assessment if property qualifies Notes that Tax Court found the Legislature would have put in specific exemption for farmland if it wanted to

28. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights The wooded portion should stand on its own: Argument that property not income-producing belied by admissions that rents were collected, even if de minimis Property is one line item; Chapter 91 applies to the whole tax lot

29. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights The wooded portion should stand on its own: Wooded portion still subject to Chapter 91 even if it doesn’t produce income ***Wooded portion found to be income-producing due to gross sales requirement of Farmland Assessment Act***

30. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Alcatel-Lucent v. Berkeley Heights Going forward: Mixed-Use properties (farmed and income-producing buildings) are subject to Chapter 91 preclusion Court notes in footnote that it was possible the predominate use of the property was not farming But not at issue in the case

31. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation FarmlandAudits Audit team is reviewing farmland assessments and applications New forms had been promulgated Statutory amendments and regulatory changes

32. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation FarmlandAudits 315 total municipalities with at least 1 Farmland Assessed property 8 counties visited Atlantic, Camden, Cumberland, Gloucester, Hunterdon, Salem, Somerset, Warren 54 audits with “end dates” Final report reviewed, signed, and returned by assessor

33. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation What to Expect FarmlandAudits 100% of applications reviewed Use of current version forms FA-1, FA-1 G.S., WD-1, FA-X Forms completed correctly

34. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation What to Expect FarmlandAudits New gross sales minimum FEC values for the tax year 10% of 3B assessments checked Descriptive narrative & activity sketch for sub-7-acre farms

35. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation What to Expect FarmlandAudits Verify MODIV acreage matches FA-1 Meet Constitutional 5-acre minimum WMPs are current Applications submitted timely

36. How to Prepare Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation FarmlandAudits Have following documents located: Application packets WMPs DEP cross reference report Talk to MODIV vendor about farmland values on tax list

37. Remember… Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation FarmlandAudits Not auditing to “get” assessors Ensuring uniformity per NJ Constitution Chapter 43 intended to root out “fake farmers”

38. Kevin F. Boyle, Principal Field Representative Property Administration, NJ Division of Taxation Residential Development Fee Appeals “Model Ordinance” has County Board of Taxation as hearing body Oversight by Office of Local Planning Services, DCA Contact: Maria Connolly, Principal Planner (609) 292-4317; Maria.Connolly@dca.nj.gov