Chapter 91: When is there no good cause?

N.J.S.A. 54:4-34, the statute commonly known as Chapter 91, is a tool in the municipal assessor’s repertoire to gather data to set assessments. If a taxpayer fails to respond properly, the appeal is subject to dismissal, subject only to a summary hearing to test the ‘reasonableness’ of the assessment, unless good cause is shown which excuses the taxpayer’s failure to provide the information in the time allotted by the statute. A recent case raises the question again of what does or does not constitute ‘good cause’ for failing to respond to the assessor’s information request.

In Golden Eagle Foundation, Inc. v. Borough of Highland Park, an unpublished opinion issued on December 30, 2016, the Tax Court questioned whether ‘good cause’ existed for a taxpayer to fail to provide income information from a time period when it did not own the property. The assessor sent a Chapter 91 request seeking income information for calendar year 2014, when the taxpayer, a New Jersey corporation, did not own the property. Four days after receiving the assessor’s request, the taxpayer faxed back a reply, indicating that it did not have information from 2014 because it did not own the property at the time. However, the entities did share principals, and the property transferred for minimal consideration.

In opposition to the municipality’s Chapter 91 motion, the taxpayer argued that there was a response provided, and that the reply was not a false account of the property’s income. The Borough argued that the taxpayer had access to the income information and could have given the requested information. The Tax Court agreed that the response which was not false, but ordered a plenary hearing to determine whether ‘good cause’ existed for the new entity to fail to provide the income information.

This case is another study for commercial property owners to carefully consider their responses to Chapter 91 information requests from their local assessors, and to quickly seek help in formulating a response that will preserve their right to appeal.