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Strict Statutory Construction Bars “Fully Deserving” Veteran Tax Relief
By Michael J. Coskey on July 17, 2019

(A recent decision affirmed the denial of a veteran’s tax exemption where the veteran, although declared 100% disabled by the VA, served in the Libyan Conflict and not in a statutorily defined “active time of war.”)

The New Jersey Constitution allows disabled veterans to benefit from special local property tax treatment in the form of a total exemption. The intent of the exemption, in part, is to compensate veterans for the experiences of war and to acknowledge their sacrifices. The Legislature codified the exemption at N.J.S.A. 54:4-3.30, providing a total exemption from real property tax for those veterans whom the United States Department of Veteran Affairs (hereinafter the “VA”) has declared 100% permanently disabled as a result of their military service.

To qualify, a veteran is required to establish, among other criteria, that he/she served in an “active time of war” as defined by N.J.S.A. 54:4-8.10(a). Recently, the Appellate Division affirmed the Tax Court’s strict statutory construction of N.J.S.A. 54:4-8.10(a) to deny a “fully deserving” veteran tax relief in Bentz v. Twp. of Little Egg Harbor, 30 N.J. Tax 530 (Tax 2018), aff’d, No. A-5878-17T1 (App. Div. July 11, 2019).

In Bentz, a veteran of the United States Navy filed a claim for a veteran’s exemption based upon the VA’s determination that he was 100% permanently disabled due to a wartime service-connected disability. Although the disability is attributable to his naval combat during the conflict between the United States and Libya (“Libyan Conflict”), his filed claim stated that he had active wartime service during the Grenada peacekeeping mission and the Lebanon peacekeeping mission. The Township denied the claim, correctly noting that the Plaintiff’s service was connected to the Libyan Conflict and not, as noted in his claim, the Grenada peacekeeping mission or the Lebanon peacekeeping mission. This is a critical distinction, since N.J.S.A. 54:4-8.10(a) omits the Libyan Conflict within the definition of “active time of war,” but includes the peacekeeping missions.  

The Bentz Court was left in the unenviable position of balancing the strong public policy reasoning behind the veteran’s exemption against judicial interference in legislative functions. As noted by the Court, the veteran’s exemption was clearly intended to benefit individuals such as the Plaintiff in Bentz. However, the Court refused to look past the plain language of the statute and second-guess the Legislature’s decision to omit the Libyan conflict from N.J.S.A. 54:4-8.10(a). Holding that the New Jersey Constitution delegated to the Legislature the sole discretion to define an event in time of war, the Court concluded that it lacked authority to rewrite N.J.S.A. 54:4-8.10(a) to include the Libyan Conflict. 

The important lesson from Bentz is that our Courts will construe tax exemptions narrowly and not look to supplant their judgments for that of the Legislature. This should assure local officials that they can rely upon the plain language of a statute when reviewing a tax exemption claim. However, please do not hesitate to contact a municipal attorney at Parker McCay P.A. with any questions regarding the application of the Bentz case or other concerns relating to the taxation of real property.

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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