Recent decisions in the New Jersey Tax Court provide new opportunities for the owners of environmentally contaminated properties undergoing remediation to seek reductions in their property tax assessments. In many cases, the owners of environmentally contaminated properties pay property tax assessments based upon their prior operating use—without consideration of environmental contamination and remediation on their properties.
The New Jersey Tax Court in Methode Electronics, Inc. v. Township of Willingboro, 28 N.J. Tax 298 (Tax 2015), reduced the property tax assessment of an industrial property formerly occupied by the manufacturer of printed circuit boards and automatic airbag parts, which had ceased manufacturing.
The tax court considered expert environmental and appraisal testimony and concluded that the nature and extent of the environmental remediation on the property made it unlikely that the property could be used or developed in the foreseeable future. The tax court accordingly reduced the property tax assessment to a nominal amount.
In other cases, where the nature and extent of the environmental contamination and remediation was not as extensive as in Methode Electronics, the tax court found that taxable value could be best determined by formulating a true market value as if the property were clean and discounting over the estimated remediation period the remediation costs to arrive at a taxable value. This is from Metuchen I, LLC v. Borough of Metuchen, 21 N.J. Tax 283 (Tax 2004).
In light of these decisions, the owners of environmentally contaminated properties undergoing remediation should evaluate their properties now to determine whether they can benefit from the filing of property tax appeals seeking reductions in their current property tax assessments.
Since April 1 is the annual deadline for filing tax appeals (May 1 where a municipal wide revaluation of municipal reassessment has been implemented) property owners should evaluate their environmentally contaminated properties well in advance of those dates to determine whether they would benefit from a property tax appeal.
Do you need assistance in evaluating your environmentally contaminated properties to determine if you would benefit from filing of property tax appeals or have any further questions? You can contact the New Jersey Tax Court by mail at Tax Court Management Office P.O. Box 972, Trenton, New Jersey 08625 or by telephone at (609)-292-5082.
John M. Scagnelli’s environmental law practice at Scarinci Hollenbeck encompasses the entire environmental law field, including environmental compliance, environmental litigation, environmental auditing, environmental permitting and environmental counseling. He serves as environmental counsel for banks and lending institutions, commercial and industrial companies, states and municipalities, real estate development organizations, and other organizations. His environmental work includes remediation projects and litigation relating to state environmental statutes. Scarinci Hollenbeck is a New York, New Jersey and Washington, D.C. regional law firm that serves a diverse group of clients in both private and public sectors. More information can be found at scarincihollenbeck.com.