30 A.2d 416 | N.J. | 1943
This writ brings before us for review a judgment of the State Board of Tax Appeals dated June 2d 1942, fixing an assessment against the prosecutor's intangibles in Hillsborough Township, Somerset County of $11,604,815.44, for the tax year 1939. The case was before the State Board on an appeal from a determination of the Somerset County Board of Taxation fixing an assessment of $8,143,159, and an amended assessment of $21,953,125. These assessments had been made on November 18th, 1940, and November 22d 1940, respectively, under circumstances to be hereafter related.
The jurisdiction of the County Board is challenged as it may well be, even though an appeal was taken to the State Board. Further, if the County Board lacked jurisdiction on the merits so did the State Board. Oradell v. State Board of Tax Appeals,
The State Board's judgment contained a finding that on the tax date, October 1st, 1938, the prosecutor possessed the following intangible personal property of the values stated:
Cash in banks ............................................... $6,364,430.58 Cash on hand ................................................ 11,962.35 Notes, accounts and interest receivable ..................... 5,005,460.21 Stocks in foreign companies ................................. 5,834,705.08 Bonds of other companies .................................... 83,079.00 Bonds of North Carolina and of municipalities therein ....... 151,845.65The prosecutor is a New Jersey corporation and on the tax day in 1938 had its chief office in Hillsborough Township, Somerset County. Its charter prohibits any activities in this state. Its only property in this state are the transfer and stock books which must be kept here. All of the intangible property was secured and used in the course of business in the states mentioned. The transmission lines and plant are operated from a main office in Charlotte, North Carolina, and all its property is taxed under the Machinery Act of that state — a tax upon intangibles. The real and personal property *451 situate in each state was also taxed. The intangibles were, of course, subject to taxation in this state if they do not fall within the exemption provided under N.J.S.A. 54:4-3.2. NewarkFire Insurance Co. v. State Board of Tax Appeals,
The proceeding originated in a letter to the township committee suggesting that personal property of a large corporation was not being taxed for the year 1939. The charge was made July 10th, 1939. The writer was employed on a percentage basis to bring in the taxes. Thereafter, the township collector made complaint to the Somerset County Board of Taxation of the omission from the assessment of intangible personal property as follows: "Cash, $5,602,986; Accounts, Notes and Interest Receivable, $5,268,663; Municipal Bonds, $246,308, Stocks, Bonds and other investments, $6,480,313; Deferred Charges, $75,607." From the complaint on prosecutor's motion all items save "cash" were struck. This action finds support in Newark v. Essex County Board ofTaxation,
On November 13th, 1940, the County Board heard the case on the "cash" items. However, on November 18th, 1940, by resolution at an ex parte hearing, it fixed an assessment on the basis of estimates of the value of intangibles made by certain persons who made affidavits. On November 22d 1940, the following resolution was passed: "Be it resolved that there be entered upon the tax lists and duplicates for Hillsborough Township for the taxing year 1939 a total assessment of $21,953,125 (Twenty-one Million, nine hundred fifty-three thousand, one hundred twenty-five dollars), thus amending an assessment determined by this Board on November 18th, 1940, against Duke Power Company, a New Jersey corporation covering omitted `cash' only, which total amount represents the true value of intangible personal property wholly omitted by the local assessor for Hillsborough Township, Somerest County, New Jersey, on the assessing *452 date, October 1st, 1938." By no such method could it make "cash" out of things not such.
The prosecutor had no notice of the hearing. It contends that both notice of the complaint and of the hearing thereon were necessary under N.J.S.A.
The prosecutor later received the following notice: "Please take notice that the next meeting of Somerset County Board of Taxation will be held at the Court House in Somerville, New Jersey, at 10 A.M. on Monday, December 2d 1940."
In compliance therewith its counsel attended at the time specified and was told by the president of the Board: "We didn't ask you to be here. We simply notified you that we would have our regular meeting to-day and the reason for that was that if you desired to examine the records of the Board of that meeting [of November 22d 1940] it was your privilege to do it."
A claim for exemption then presented was not allowed in evidence but was filed in the Board's records.
N.J.S.A.
There was no compliance whatever with the provisions of the law as we have seen. The notice was, in part, defective and there was no notice of the hearing when the question of the value of intangibles was determined, and no proceeding in a judicial manner as required by law. Duke Power Co. v. Essex CountyBoard of Taxation,
The defendants contend that their proceedings were proper because it was under the first part of N.J.S.A.
There is a vast difference between the inclusion of property omitted by the assessor and property omitted from the assessment.
N.J.S.A.
N.J.S.A.
But the time for this action finds a limitation in the following provision of law (N.J.S.A.
N.J.S.A.
That there must be some limit of time as to the settlement of tax controversies is apparent from the statute and the cases.Kenilworth v. Board of Equalization,
The County Board could not, on its own motion, make the assessment on November 22d 1940, and then act as an appellate body on December 2d 1940. It was not acting according *455 to law at either time. It might just as well have taken the figures for the assessment out of a news report.
The assessment was made on the complaint of an aggrieved taxpayer, and the procedural direction of the statute required a specific notice to the owner of the precise property claimed to be omitted from the assessment and a hearing upon notice and a deliberate judgment.
The underlying question in the case is the proper construction of the statute N.J.S.A.
The duplicates, when delivered by the county boards under N.J.S.A.
Even if the statute did not require notice and a hearing, when property omitted in the assessment is to be added, still common justice would require such a proceeding. Jersey City v. Boardof Equalization,
However, under our statutes the property in question was exempt from taxation. "The personal property owned by citizens or corporations of this state, situate and being out of the state, upon which taxes shall have been actually assessed and paid within twelve months next before October first, being the day prescribed by law for commencing the assessment shall be exempt from taxation under this chapter." N.J.S.A. 54:4-3.2.
Personal property is defined in N.J.S.A.
The question is one of fact. There is no doubt that all the property assessed was out of the state. The question is simply whether taxes were actually assessed and paid thereon within twelve months next before October 1st of the year in which the assessment should have been made.
The Machinery Act of North Carolina is chapter 291 of the Public Laws 1937. It imposes a tax upon all property tangible and intangible within the state. The taxes raised are apportioned among the subdivisions of the state as taxes are apportioned under several of our taxing statutes imposing taxes upon public service corporations. The proofs show the assessment and payment of taxes in accordance with the act. The tax dates may vary somewhat, but for the twelve months prior to the assessment date there can be no doubt of the assessment and payment of taxes upon all the property included in the assessment here questioned. *457
The proofs clearly demonstrate that taxes had been assessed and been paid in North Carolina upon the property included in the assessment by the State Board. There was no basis for a conclusion that the property did not fall within the exempting statute. At all events, the only item included in the assessment when perhaps the proper procedure was complied with before the County Board, i.e., "cash," was taxed in North Carolina so that the exemption statute of necessity applied.
Since none of the property in question was liable to taxation in Hillsborough Township, we need not consider the application of the remedial statutes N.J.S.A.
Since the property assessed was not subject to taxation and since the procedure before the State Board was no substitute for a proper proceeding before the County Board, the assessment is set aside and the judgment is reversed. *458