Bentz v. Twp. of Little Egg Harbor, DOCKET NO. 009763-2017

• Decision Date: 25 July 2018
• Docket Number: DOCKET NO. 009763-2017
• Court: New Jersey Tax Court
• Parties: RONALD BENTZ, Plaintiff, v. TOWNSHIP OF LITTLE EGG HARBOR, Defendant.

RONALD BENTZ, Plaintiff, v. TOWNSHIP OF LITTLE EGG HARBOR, Defendant.

DOCKET NO. 009763-2017

TAX COURT OF NEW JERSEY

July 25, 2018

NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS

Ronald Bentz, plaintiff (self-represented).

Robin La Bue for defendant (Gilmore & Monahan, P.A., attorneys).

Stephen J. Colby for Intervenor, Director, Division of Taxation (Gurbir S. Grewal, Attorney General of New Jersey, attorney).

SUNDAR, J.T.C.

This constitutes the court's opinion in connection with the above captioned matter wherein plaintiff ("Mr. Bentz") seeks an exemption from local property tax on his residence located in defendant, Township of Little Egg Harbor ("Township") for tax year 2017, on grounds that he is a disabled veteran. The Township denied the exemption because Mr. Bentz's naval service in Libya during 1986 is not enumerated in the definition "active service in time of war" in N.J.S.A. 54:4-8.10(a). Mr. Bentz argues that the statute's failure to include Libya is unconstitutional when it is undisputed that there was a conflict in Libya in 1986.

For the reasons stated below, the court finds that the Legislature has, pursuant to constitutional delegation, limited the veterans' local property tax exemption and deduction to statutorily defined conflicts and operations, which does not include Libya. This court cannot engraft a conflict which has not been designated by the Legislature. The complaint is therefore dismissed.

PROCEDURAL HISTORY AND FACTS

The following facts are undisputed. Mr. Bentz served in the U.S. Navy from September 6, 1983 to September 5, 1986. He was stationed in Libya (on a ship) during 1986 for a period of 96 days during which there was a conflict between Libya and the United States. He was thereafter honorably discharged. His discharge certificate reflects that he was in "sea service."

Mr. Bentz was eligible for a Navy Expeditionary Medal for his service in Libya during the period of March 21, 1986 to June 27, 1986; a Navy Unit Commendation Ribbon for his service during the period March 23, 1986 to April 17, 1986; and a Meritorious Unit Commendation Ribbon for his service during the period August 29, 1985 to September 20, 1985. He was also awarded a "sea service deployment ribbon w/1 star."

Effective September 6, 2016, Mr. Bentz was declared as 100% permanently disabled due to a "wartime service-connected disability" by the federal Department of Veterans Administration ("VA").

On April 17, 2017, Mr. Bentz filed an application (Form D.V.S.S.E. "Claim for Property Tax Exemption on Dwelling House of Disabled Veteran or Surviving Spouse/Surviving Domestic Partner of Disabled Veteran or Serviceperson") with the Township's assessor seeking local property tax exemption on his residence on grounds he was an "[h]onorably discharged disabled veteran with active wartime service" in the U.S. Navy. Therein, he claimed his wartime services to be the "Lebanon Peacekeeping Mission" from September 26, 1982 to December 1, 1987.

By notice dated April 25, 2017, the Township's assessor/collector disallowed Mr. Bentz's application for "a veteran's property tax deduction/disabled veteran's property tax exemption."The reasons were a failure to meet two statutory requirements: (1) "Active Duty in a qualified branch of the" U.S. Armed Forces "'in time of war;'" and, (2) "Peacekeeping Missions require a minimum of 14 days service in the actual combat zone."

Mr. Bentz petitioned the Ocean County Board of Taxation ("County Board") challenging the exemption denial. The County Board affirmed the denial, which resulted in the affirmance of the 2017 local property tax assessment of $229,100 upon Mr. Bentz's residence.

While the County Board petition was pending, the New Jersey Division of Taxation ("Taxation") advised Mr. Bentz and the Township's tax collector that the tax collector had erroneously granted and paid Mr. Bentz $250 as a veteran's property tax deduction from 1997 to 2017. The payment was in error because "based on the information provided," Mr. Bentz "did not meet the statutory requirements for qualifying war service." Taxation advised that it would seek a refund of a total of $4,350 from the Township.

Mr. Bentz then filed a complaint with this court challenging the County Board's judgment. He contended that the exclusion of Libya in N.J.S.A. 54:4-8.10(a) denies him equal protection and violates the Supremacy Clause. The court treated his pleadings as requesting summary judgment since the facts were undisputed. At the court's direction, Mr. Bentz provided notice, and served a copy of his complaint and pleadings, to the Attorney General of New Jersey. Thereafter, Taxation, through the Attorney General, moved to intervene to defend the constitutionality of N.J.S.A. 54:4-8.10(a). The court then conducted oral argument.

FINDINGS

(A) Motion to Intervene

Rule 4:28-4(d) provides that when a motion to intervene is filed by a State agency, the same "shall be freely granted for good cause and in the interests of justice." Mr. Bentz challenges the constitutionality of N.J.S.A. 54:4-8.10(a), a taxing statute, the enforcement and oversight of which is entrusted to Taxation, although procedurally administered by the taxing district. See generally N.J.S.A. 54:4-8.13; 4-8.19; N.J.A.C. 18:27-2.22. The court therefore finds good cause exists to grant Taxation's motion to intervene.

(B) Veteran's Tax Exemption

Our Constitution allows real property owned by veterans to benefit from special local property tax treatment.¹ In 1947, it provided as follows:

Any citizen and resident of this State now or hereafter honorably discharged or released under honorable circumstances from active service in time of war in any branch of the armed forces of the United States, shall be exempt from taxation on real and personal property to an aggregate assessed valuation not exceeding five hundred dollars, which exemption shall not be altered or repealed. Any person hereinabove described who has been or shall be declared by the United States Veterans Administration, or its successor, to have a service-connected disability, shall be entitled to such further exemption from taxation as from time to time may be provided by law.

[N.J. Const. art. VIII, § 1, ¶ 3 (emphasis added).]

Thus, a veteran who was honorably discharged "from active service in time of war" was entitled to a $500 exemption from local property tax, and also to any additional exemptionprovided by the Legislature "from time to time," as long as the veteran had a service-connected disability as determined by the VA.

In response, in 1948, the Legislature first enacted N.J.S.A. 54:4-3.30 (hereinafter the "Exemption Statute") granting a 100% tax exemption for a residence owned by a veteran who was discharged "from active service, in time of war," and suffered a "service-connected disability," or was determined by the VA to be 100% permanently disabled due to military service. The Exemption Statute did not define the term "in time of war." However, Taxation promulgated regulations, which among others, specified that a claimant must "conclusively establish that his service in the armed forces was in 'time of war.'" See Dept. of Treasury, Div. of Taxation, Regulations Governing the Disposition of Applications of Veterans with Service Connected Disabilities of the Character Specified in C. 259, Laws of 1948 for Exemption of Residence Property from General Property Taxation, ¶ 7 (Oct. 1, 1948).² Service during the Civil War, War with Spain, and both World Wars was "deemed sufficient" proof that the veteran satisfied the "in time of war" requirement. Ibid. The regulation noted that "[i]n using the phrase 'in time of war,' it is believed that the framers of the Constitution of 1947 and the Legislature intended to specify only periods of actual conflict." Ibid.

In 1951, the Legislature enacted another statute to provide the constitutionally granted $500 exemption for all veterans, not just those who were 100% disabled. See N.J.S.A. 54:4-3.12 (now repealed). In this statute, the Legislature identified certain wars for purposes of the requirement that a veteran have been in active service "in time of war." Taxation's interpretive regulations in this regard, also provided a restrictive meaning to the phrase "in time of war." See Dept. ofTreasury, Div. of Taxation, Regulations Governing the Disposition of Applications by Associations Organizations and Corporations for Exemption of Real Property Under C. 135, L. 1951 (N.J.S.A. 54:4-4.4), ¶ 6 (Aug. 1, 1951). Listing both World Wars, the Spanish-American War and the Civil War for purposes of the "in time of war" requirement, the regulation noted that if service was in any branch of the armed forces, but "during a rebellion, insurrection, or other military or naval incident, short of war," then the exemption was not available pursuant to the 1947 Constitution. Ibid. In contrast, the regulation attributed a broad meaning to the length of service by noting that "[a]ny service in the Armed Forces in time of war, no matter how brief, is sufficient" because neither the Constitution nor the statute "prescribe[] the length of time" of service. Ibid.

Pursuant to a 1952 legislative amendment, Taxation subsequently expanded the definition of "time of war" to include a specified period of the Korean conflict.³

In 1953, our Constitution was amended (effective 1954) to expand the tax benefits to veterans honorably discharged from active service as follows:

Any citizen and resident of this State now or hereafter honorably discharged or released under honorable circumstances from active service, in time of war or of other emergency as, from time to time, defined by the Legislature . . . .

[N.J. Const. art. VIII, § 1, ¶ 3 (emphasis added).]⁴

This constitutional amendment also extended benefits to the surviving spouse of such a veteran. Ibid. See also L. 1953, c. 436 (effective 1954); Dept. of Treasury, Div. of Taxation, Regulations for the Guidance of...