Horrobin v. Director, Division of Taxation

• Decision Date: 07 November 1979
• Citation: 172 N.J.Super. 173,411 A.2d 479,1 N.J.Tax 213
• Parties: , 411 A.2d 479 Robert G. HORROBIN, Plaintiff, v. DIRECTOR, DIVISION OF TAXATION, Defendant.
• Court: New Jersey Tax Court

Page 173

172 N.J.Super. 173

1 N.J.Tax 213, 411 A.2d 479

Robert G. HORROBIN, Plaintiff, v. DIRECTOR, DIVISION OF TAXATION, Defendant.

Tax Court of New Jersey.

Nov. 7, 1979.

Robert G. Horrobin, pro se.

Harry Z. Haushalter, Deputy Atty. Gen., for defendant (John J. Degnan, Atty. Gen., attorney).

CONLEY, J. T. C.

Plaintiff homeowner filed a written application for a 1978 homestead tax rebate with the Director of the Division of Taxation. The application was received by the Division of Taxation on December 8, 1978. The Director advised plaintiff that his application had been denied "due to your failure to file the application by the extended filing deadline date of March 31, 1978." Plaintiff appealed to the State Division of Tax Appeals and the matter has been transferred to the Tax Court pursuant to N.J.S.A. 2A:3A-26.

The Director has moved for a dismissal of the taxpayer's complaint because it was filed after the March 31, 1978 deadline, as extended by N.J.A.C. 18:12-7.12. The Director argues that strict compliance with the statutory filing deadline is required. Plaintiff argues that he could not have filed the application by the extended deadline because sufficient tax information was not available for completion of the application form until June 1978, when he first received a tax bill for his property, which he purchased in August 1977. The issue posed by this case is whether plaintiff's application should be considered on the merits by the Director of the Division of Taxation even though the application was not filed by the March 31, 1978 deadline.

Indeed, as the Director argues, the courts of this State have traditionally required that taxpayers file timely applications as well as appeals and that they are barred from relief if they fail to do so. The basis for these decisions has been that statutory tax deadlines are "substantive" or "jurisdictional" statutes of limitation, and that the courts are without authority to extend such deadlines established by the Legislature. See, for example, Hackensack v. Rubenstein, 37 N.J. 39, 178 A.2d 625 (1962); Newark v. Fischer, 3 N.J. 488, 70 A.2d 733 (1950); Hackensack Water Co. v. Division of Tax Appeals, 2 N.J. 157, 65 A.2d 828 (1949); Danis v. Middlesex Cty. Bd. of Taxation, 113 N.J.Super. 6, 272 A.2d 542 (App.Div.1971); Clairol, Inc. v. Kingsley, 109 N.J.Super. 22, 262 A.2d 213 (App.Div.1970), aff'd o. b. 57 N.J. 199, 270 A.2d 702 (1970), app. dism. 402 U.S. 902, 91 S.Ct. 1377, 28 L.Ed.2d 643 (1971), and Delaware Tp. v. Neeld, 52 N.J.Super. 63, 144 A.2d 801 (App.Div.1958), all relied upon by the Director. The underlying doctrine is that of the separation of powers, N.J.Const. (1947), Art. III, § 1, which precludes the members of one branch of government from exercising any of the powers properly belonging to either of the other branches, and which has been held to mean that a clear and unambiguous statute is not open to construction by the courts. Cold Indian Springs Corp. v. Ocean Tp., 154 N.J.Super 75, 94, 380 A.2d 1178 (Law Div.1977), aff'd 161 N.J.Super. 586, 392 A.2d 175 (App.Div.1978), certif. granted 78 N.J. 410, 396 A.2d 596 (1978).

However, despite the clarity and certainty of the case law relied upon by the Director in support of his argument that plaintiff's failure to meet the statutory deadline is fatal to this court's jurisdiction, that case law has been modified by our Supreme Court in White v. Violent Crimes Comp. Bd., 76 N.J. 368, 388 A.2d 206 (1978). In White the court discussed the statutory time limitation for the filing of claims with the Violent Crimes Compensation Board. The statutory framework in White provided a mechanism for limited public reimbursement for financial losses suffered by innocent victims of violent crime. N.J.S.A. 52:4B-1 Et seq. The court held that the limitation period set forth in N.J.S.A. 52:4B-18 "is properly characterized as a member of the substantive class of limitation statutes." Id. at 375, 388 A.2d at 209. The homestead rebate filing deadline statute is also within the substantive class of limitation statutes. However, the court in White stated that despite "traditional and respectable authority" construing a party's noncompliance with a substantive limitation period as creating "an absolute bar to his claim," the determination that a substantive limitation was at issue could no longer end the court's inquiry. Id. at 376, 388 A.2d at 210. After analyzing decisions of the United States Supreme Court and the California Supreme Court, the court adopted the view that

. . . in the case of a statutorily created right, a "substantive" limitation period may appropriately be tolled in a particular set of circumstances if the legislative purpose underlying the statutory scheme will thereby be effectuated. (Id. at 379, 388 A.2d at 211)

In analyzing the Criminal Injuries Compensation Act of 1971, N.J.S.A. 52:4B-1 Et seq., the court found no legislative intent to "preclude allowing a toll (of the limitation period) because of a victim's crime-induced incapacity." Id. at 384-387, 388 A.2d at 214. The court concluded on the facts of the case that the limitation period of N.J.S.A. 52:4B-18 had been tolled and that plaintiff's application for victim compensation pursuant to the Criminal Injuries Compensation Act of 1971 was not barred.

The holding of the White case impels a close consideration of the objectives the Legislature sought to achieve in enacting the Homestead Rebate Act, N.J.S.A. 54:4-3.80 Et seq., and in establishing a deadline for the filing of homestead rebate applications. The filing deadline in the rebate statute can no longer be treated as an absolute jurisdictional bar as it would have been under prior case law. As stated in White, "the focus of the judicial inquiry must remain on the question of legislative intent" in determining whether the statutory filing deadline may be tolled in any particular case. 76 N.J. at 387, 388 A.2d at 215. The standard to be applied under the White analysis is therefore virtually the same as that applied in construing an ambiguous statute. As stated in Cold Indian Springs Corp. v. Ocean Tp., supra :

It is the responsibility of the court in construing a statute to determine what the Legislature intended rather than apply a meaning which seems fair and equitable to the court. Matawan v. Monmouth Cty. Tax Bd., 51 N.J. 291, 298, 240 A.2d 8 (1968). It is not the province of the judiciary to question the wisdom of statutory regulations, In re Howard Savings Inst., 32 N.J. 29, 46, 159 A.2d 113 (1960), or to revise tax programs. Matawan v. Monmouth Cty. Tax Bd., supra (51 N.J.) at 298 (240 A.2d 8); Ridgefield Park v. Bergen Cty. Bd. of Taxation, 31 N.J. 420, 431, 157 A.2d 829 (1960). (154 N.J.Super. at 95, 380 A.2d at 1188.)

The Homestead Rebate Act was enacted after the Tax Clause of the State Constitution had been amended by approval of the voters at the general election of November 4, 1975. As a result of the amendment, the following language was added to the Constitution:

The Legislature may adopt a homestead statute which entitles homeowners, residential tenants and net lease residential tenants to a rebate or a credit of a sum of money related to property taxes paid by or allocable to them at such rates and subject to such limits as may be provided by law. (N.J. Const. (1947), Art. VIII, § I, par. 5)

At the next general election, on November 2, 1976, the people voted to amend the State Constitution to provide that the entire net receipts from any personal income tax be annually appropriated by the Legislature to counties, municipalities and school districts, "exclusively for the purpose of reducing or offsetting property taxes." N.J.Const. (1947), Art. VIII, § I, par. 7. It was clearly the intent of the framers of the two constitutional amendments that homestead rebate payments would be funded by the gross income tax, for the initial version of the Homestead Rebate Act provided that

This act shall take effect immediately but shall remain inoperative unless and until a New Jersey Gross Income Tax has been enacted. (L.1976, C. 72, § 16)

Accordingly, it must be concluded that the overall objective of the Legislature in enacting the Homestead Rebate Act, tied as it was to income tax revenues, was to assure the public that an income tax, if adopted, would be used for property tax relief rather than for ever-increasing state expenditures.

The Homestead Rebate Act was subsequently amended by Chapters 17, 241, 242 and 356 of the Laws of 1977, each of which was in effect for 1978, the year involved in the present case. Chapter 17 changed the characterization of the tax benefit from that of an "exemption" to that of a "rebate," and made certain other modifications not pertinent to this discussion. Chapters 241 and 242 extended the availability of the homestead rebate to resident shareholders in nonprofit residential cooperatives and mutual housing corporations. Chapter 356 provided for a single annual rebate payment rather than semiannual payments and established March 31 as the date by which each local tax collector must advise the Director of the names of property owners whose taxes are delinquent and the amounts of such delinquencies, to avoid payment of a rebate to a property owner who had not fully paid his taxes. It is apparent from these several amendments to the statute that the Legislature thoroughly considered the language it used in the Homestead Rebate Act.

The pertinent parts of the Homestead Rebate Act are as follows:

Every citizen and resident of this State shall be entitled, annually, to a homestead rebate on a dwelling house and the land upon which such dwelling house is situated . . . . (N.J.S.A. 54:4-3.80(a))

No homestead rebate, as provided herein, shall be allowed except upon written application therefor, which application shall be on a form prescribed by the Director of the Division of Taxation, and provided for the use of claimant...