Sponsored by:
Senator LINDA R. GREENSTEIN
District 14 (Mercer and Middlesex)
Senator DECLAN J. O'SCANLON, JR.
District 13 (Monmouth)
SYNOPSIS
Requires municipality to return to taxpayer property taxes paid in error due to assessor’s or owner’s mistake.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning errors in the assessment of real property and property tax overpayment and amending R.S.54:4-54.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.54:4-54 is amended to read as follows:
54:4-54. a. Where by mistake property real or personal has been twice entered and assessed on the tax duplicate, the governing body of the taxing district or county board of taxation may order and cause the tax record to be corrected and if the tax has been twice paid the governing body of the taxing district shall refund the excessive payment without interest.
b. Where by mistake an assessment intended for one parcel has been placed upon another, the governing body may cancel the erroneous assessment, return without interest any money paid by one not the owner of the parcel intended to be assessed, and enter upon the record the assessment and tax against the proper parcel, after a hearing upon five days' notice to the owner.
c. Where one person has by mistake paid the tax on the property of another supposing it to be his own, the governing body after a hearing, on five days' notice to the owner, [may] shall return the money paid in error without interest and restore the record of the assessment and tax against the property in the name of the true owner, provided the lien of the tax has not expired and no transfer or encumbrance has been put on record against the property since the date of the payment in error.
d. No assessment of real or personal property shall be considered invalid because listed or assessed in the name of one not the owner thereof, or because erroneously classed as the land of an unknown or nonresident owner.
e. All refunds made pursuant to subsections a. through c. of this section shall be subject to a three-year statute of limitations, and shall be computed as refunds for the tax year in which the governing body has been notified by the taxpayer of the error, and the three tax years immediately preceding the notice.
(cf: R.S.54:4-54)
2. This act shall take effect immediately.
STATEMENT
This bill would require a municipality to issue a property tax refund to a property owner who overpays his or her property taxes. The New Jersey Statutes currently permit, but do not require, a municipality to make such a refund to a property taxpayer under these circumstances.
This amendment is necessary to revise the statute to reflect the New Jersey Tax Court’s decision in Hanover Floral v. East Hanover Twp., 30 N.J. Tax 181 (Tax 2017), which required Hanover Township to refund excess property taxes paid by Hanover Floral as the result of an error made by the municipal tax assessor. The Tax Court limited the amount of the refund due to Hanover Floral to the excess taxes paid in the tax year in which Hanover Floral filed its complaint, and the three years prior.
The bill also limits the amount of the refund to the amount of excess taxes paid in the tax year in which the governing body has been notified by the taxpayer of the error, and the three tax years immediately prior.