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Commercial Property Owners Beware - Municipal Annual Demand For Income Is For Real
By: Sylvia Hall, Esq.

New Jersey Property owners, who have income producing properties such as commercial establishments, may desire to file a municipal tax appeal in these difficult economic times. A taxpayer, however, prior to doing so, must examine its records and be sure to respond to any and all mailings received from the municipal tax assessor's office. Failure to comply with the tax assessor's demand for income and expense data, can subject an otherwise successful appeal to be dismissed. Case in point, if a taxpayer receives an Annual Statement of Income Producing Properties or Income and Expense Statement from a municipality via certified mail, the income form must be completed and returned in a timely manner. These forms are generally distributed in the late summer or early fall, so that the tax assessor will have appropriate property income information for the upcoming assessment valuation date of October 1st. The income form is mailed pursuant to the tax assessor's public records, so it is not a defense that the landlord did not provide it to the tenant in cases where the leasehold pays the property taxes.

Municipal tax assessors use the information they receive from the property owner to determine the “fair assessment” of taxes for the property in question and those type of properties in that class. If the taxpayer does not complete the income form, the tax assessor may use that action to have the otherwise meritorious tax appeal dismissed under New Jersey Chapter 91 laws. The completion of the income form can actually benefit the taxpayer in the instance where there are actually less tenants or a decrease in the income generated from the property from the prior year.

Routine forms from any government agency may be annoying and seem to be without significant benefit to the property owner. The Annual Statement of Income, however, is not one to ignore.

Sylvia Hall is an Associate at WJ&L and actively practices in our Litigation Department.