Town of Montclair v. State Bd. of Tax Appeals

• Decision Date: 12 November 1941
• Docket Number: No. 210.,210.
• Citation: 22 A.2d 525,127 N.J.L. 382
• Parties: TOWN OF MONTCLAIR et al. v. STATE BOARD OF TAX APPEALS et al.
• Court: New Jersey Supreme Court

22 A.2d 525

127 N.J.L. 382

TOWN OF MONTCLAIR et al.

v. STATE BOARD OF TAX APPEALS et al.

No. 210.

Supreme Court of New Jersey.

Nov. 12, 1941.

Certiorari proceeding by the Town of Montclair and others, municipal corporations of the state of New Jersey, against the State Board of Tax Appeals and Borough of Roseland, a municipal corporation, to review a judgment of the State Board of Tax Appeals setting aside a determination of the Essex County Board of Taxation and directing such Board to deduct a specified sum from the total of the revised ratables of the Borough of Roseland in determining the amount of money to be raised for state, state school and county purposes for the year 1941.

Judgment of the State Board of Tax Appeals set aside.

Argued May term, 1941, before BROGAN, C. J, and CASE and HEHER, JJ.

Herbert J. Hannoch and Morris Weinstein, both of Newark, for prosecutors.

Edward R. McGlynn, of Newark, Alfred J. Grosso, of Orange, and Joseph Weintraub, of Newark, for respondents.

CASE, Justice.

The writ brings up a judgment of the State Board of Tax Appeals setting aside a determination of the Essex County Board of Taxation and directing that board to deduct the sum of $2,248,325.94 from the total of the revised ratables of the Borough of Roseland in determining the amount of money to be raised for state, state school and county purposes for the year 1941. The litigation grows out of the Voorhees Act and supplemental legislation, P.L.1900, ch. 195, P.L. 1917, ch. 17, P.L.1919, ch. 25, R.S. 54:31-1, et seq, N.J.S.A. 54:31-1 et seq, R.S. 54:32-1 et seq, N.J.S.A. 54:32-l et seq. The State Tax Commissioner revised the 1936 and 1937 valuations placed by the Roseland assessor on property of Public Service Electric and Gas Company to be used in the distribution of the gross receipts franchise tax and reduced them in the aggregate sum above mentioned. The money raised from the borough during those years for state, state school and county purposes had been determined on total ratables that included the original utility property assessments. The state board held that the borough was entitled, under R.S. 54:4-19, N.J.S.A. 54:4-49, to be credited, on its 1941 ratables so far as concerned the amount to be raised in 1941 for the above named purposes, with the reductions imposed by the commissioner, September 20, 1937, on the 1936 and 1937 valuations. The judgment entered thereon is under review.

Formerly the property of a utility was assessed in the same manner and with the same effect as the property of any other owner. The Voorhees act left the property of the affected utilities in the local ratables for certain civic purposes but exempted the utilities from a property tax (as to certain items of property) and substituted a tax on the gross receipts of the utilities and caused the fund thus accumulated to be distributed among the municipalities wherein the property was situated in the proportion which the assessed utility ratables in a given municipality bore to the total of the assessed ratables of the utility throughout the state. The statutory machinery by which the assessments became the factor of distribution was that the several assessors assessed the value of the utility property in their respective districts, R.S. 54:31-2, and filed returns thereof in the office of their county board of taxation, R.S. 54:32-4; and that board transmitted copies of the returns filed by the assessors to the commissioner, who had power to inquire into, equalize and revise all of the valuations so returned, R.S. 54:31-5, and was under the duty to ascertain and apportion the fund upon the basis of his revision among the various taxing districts and to certify the apportionment to the respective collectors of taxes in the several municipalities entitled thereto.

The assessor of the Borough of Roseland assessed the property of Public Service Electric and Gas Company in that borough at $3,396,600 for the year 1934, at the same amount for the year 1935; at $4,521,600 for the year 1936 and at the same amount for the year 1937. After the commissioner had revised and corrected the 1934 valuations certified to him by the several county boards, the City of Hoboken appealed to the State Board of Tax Appeals from the commissioner's revised valuation of the utility property in that municipality and brought in, as parties, the numerous municipalities which, as prospective distributees of the fund, were interested. In disposing of that litigation the state board decided, February 5, 1935, that the commissioner's valuations for 1934 should be set aside and that the commissioner should make an apportionment of the gross receipts on the basis of the valuations certified by the respective assessors to the respective county tax boards. When the valuations for 1935 were certified the commissioner again made his own valuations (his valuation for Roseland was $2,088,084.27 as against the assessor's $3,396,600), differing in divers instances from those certified by the assessors, and again the city of Hoboken appealed to the state board. That board decided and adjudged, on October 26, 1936, that the apportionment made by the commissioner should be set aside and that those municipalities, of which the Borough of Roseland was one, whose assessors had certified as the 1935 valuations figures identical with those for 1934, or practically so, he should adopt the assessor's valuations; with other directions for other instances. Accordingly Roseland's 1934 valuation of the utility's property was fixed at $3,396,600 and its 1935 valuation at the same figure. In each of those years the borough assessor, as we have seen, had placed the valuation at that amount. The commissioner withheld his certification as to the 1936 and the 1937 valuations until September 20, 1937; on that day, the day on which he certified the adjudicated 1935 valuations, he certified the Roseland valuations for 1936 at $3,397,827.78, and for 1937 at $3,397,046.28. There was no appeal. The appropriate shares of the gross receipts taxes were paid to the borough on that basis.

Although the utility was exempted from the payment of a property tax nevertheless, by the then provisions of the statute, the assessment made by the assessor on its property remained a part of the ratables of the borough for the apportionment of the borough's share of state, state school and county taxes. R.S. 54:4-49 provides:

"Except as to any state tax at a fixed rate provided for in sections 54:4—50 and 54:4-51 [N.J.S.A. 54:4-50, 54:4-51] [conceded not to apply hereto] of this title, each county board of taxation in apportioning the amount of money to be raised in the various taxing districts for state, state school or county purposes, after having received the tax lists and duplicates of the local assessors and having revised, corrected and equalized the assessed value of all the property in the respective taxing districts, shall deduct from the total valuations of each taxing district as so revised, corrected and equalized an amount equal to the ratables of the preceding year or years of such district represented by the reduction or all reductions made in the assessments of such districts subsequent to the apportionment of the preceding year or years in consequence of any appeal or appeals to the county board of taxation or to the state board of tax appeals, or by reason of the decision of any court, and the total valuations as ascertained after the assessments in the various assessment lists and duplicates have been revised, corrected and...