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Changes to Timing for Payment of Non-Residential Tax Appeals by Municipalities  
By Jeffrey D. Winitsky on August 28, 2019

On August 9, 2019, Governor Phil Murphy Assembly Bill A-2004, (the "Bill"), which now permits municipalities in New Jersey to pay non-residential property tax appeal refunds over a period of three years.   Specifically, pursuant to the Bill, municipalities are now permitted to pay the refund to the taxpayer over three equal annual installments, plus interest, instead of being required to pay the appeal within 60 days of final judgment.  Pursuant to the Bill, to the extent that the municipality elects to pay the refund over time, the interest rate payable to the taxpayer is the lesser of (a) 5% or (b) the "prime rate", plus 1% for each month (or fraction of such month), compounded annually at the end of each year from the date the tax was due until the date of payment (less any amount of taxes, interest, or both, that may be applied against prior delinquencies).

The longer time frame afforded by the Bill will now allow municipalities the option of paying the refund over time through their operating budget or through the issuance of debt, whichever is deemed most economically sound.  Extending the period for repayment will also, in many cases, allow municipalities to avoid having to utilize an emergency appropriation to pay for non-residential tax appeal refunds since many of such refunds are typically larger in size (and usually exceed the amounts held in municipal tax appeal reserves, if any).

Notwithstanding the passage of the Bill, municipalities are still required to pay residential tax appeal refunds within 60 days of the final tax appeal judgment.

Should you have any questions regarding details of the Bill, including its application, the attorneys of Parker McCay's Public Finance and Municipal and Government Departments are available to assist. 

The content of this post is for informational purposes only and should not be construed as legal advice or legal opinion.  You should consult a lawyer concerning your specific situation and any specific legal question you may have.

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