New Jersey Tax Appeals: Issuance of Refunds by Municipality

As real estate values continue to drop, municipalities are once again scrambling to budget for reimbursements to taxpayers who win their appeals. While real estate tax appeals are typically filed by April 1, they are often not heard until July or August. In some cases, the County Tax Board will then take as long as 4 to 6 weeks to render a decision. Since Real Estate Tax payments are due in February, May, August and November of each year, taxpayers who have filed appeals very often will have paid at least three quarters of real estate taxes prior to the County Board of Taxation rendering a decision as to whether they are entitled to a reduction. For the majority of our clients, who do obtain reductions in their assessments, the question then asked is when are they going to see an adjustment or credit on their tax bills. Under N.J.S.A. 54:3-27.2, the Tax Collector of the municipality shall refund any excess paid within 60 days of the date of judgment. Should the matter proceed to Tax Court, it is very possible that a Judgment would not be rendered until a couple of years after the Tax year for which the appeal is sought. In those cases, where the municipality is forced to give back overpayments for multiple years, it is not unusual for the municipality to delay reimbursement and pay the taxpayer a 5% interest penalty as per statute until the overpayment can be fully reimbursed.