If an NJ biz wins a tax appeal, towns can keep money for 3 years
A new law signed by Gov. Phil Murphy this month gives New Jersey towns a break —up to three years to refund to commercial property owners for successful tax reassessment appeals over $100,000.
Mike Cerra, assistant executive director of the New Jersey League of Municipalities, said when a town takes a big hit from one of these judgements, lowering a commercial business's taxes, it affects all local taxpayers.
"It has been a significant problem for local budget-makers, particularly following a recession or economic downturn, when historically you see more assessments being appealed," Cerra said. "And that certainly happened following the 2008 recession, when we saw a number of properties seeking reassessment of tax bills."
But the new law, which took effect Aug. 9, gives towns some breathing room in making refunds.
"You can plan for it as part of your budgetary process, which hopefully will ease the burden," Cerra said.
He called it a "soft landing for local budget makers."
"But it's also a softer landing for property taxpayers, because ultimately when an assessment goes down for one property owner, the difference is absorbed across the board," he said.
He says some towns, including Edison and Atlantic City, were struggling with these tax assessment redos.
"We have witnessed in circumstances towns needed to bond in order to cover some of these payments," he said.
The new law doesn't cover tax appeals filed prior to its Aug. 9 enactment.
Andrew Musick, vice president of government affairs for the New Jersey Business & Industry Association, told New Jersey Spotlight communities already benefit from the cushion provided in an often lengthy tax appeals process.
“Requiring business owners to wait this much longer to recoup their overpayments, when some have invested years in pursuing a successful property-tax appeal, is neither fair nor reasonable,” Musick said, according to the report. “This change also allows municipalities to treat residential and nonresidential tax appeals differently.
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