By Fredrick P. Niemann, Esq. a New Jersey Appeal Attorney
There are two situations where a taxpayer can get around the strict time constraints for appeals. The first is when there is a violation of due process, see CMMI v. Bellville Twp., 19 N.J. Tax 193, 198 (App. Div. 2000), and when the taxpayer pays the tax and then requests a refund. However, both are applicable only in rare circumstances.
In CMMI¸ the taxpayer was a non-profit entitled to tax exempt status. See CMMI, supra, 19 N.J. Tax at 195. It received the notice of being placed on the tax roles one day before the filing deadline for tax exempt status because of a change of address. See id. at 196. As a result, the taxpayer was subject to a $4 million tax. Id. As a result, the court found it “unfair and unrealistic” to require the nonprofit entity to file its papers within 24 hours. See id. at 198 (“It is unfair and unrealistic to require the initiation of an appeal on the question of tax exemption within twenty-four hours or less or suffer the consequences of a tax assessment of over $4 million.”); see also Bonda v. Div. of Taxation, 22 N.J. Tax 77, 83 (2004) (citing CMMI). Here, however, there is no equivalent argument. The January 20 letter provided adequate notice and the State, under the terms of the January 20, 2012 letter, gave the statutory 90 days for the appeal of its decision that the protests were time barred. Therefore, due process was afforded.
The second situation applies to self-assessed taxes. A taxpayer may make avail herself of the refund procedures in such situations; however, when the Director makes an assessment against the taxpayer, it triggers the operable limitation periods. See Toys “R” Us v. Director¸ 300 N.J. Super. 163, 169 (App. Div. 1997); see also Black Whale, Inc. v. Director, Div. of Taxation, 15 N.J. Tax 338, 345-48 (Tax Ct.1995) (if a payment is made after an assessment by the Director, the two-year refund provision is inoperative. In that case, a taxpayer can only protest the assessment by asking for a hearing with the Director of the Division of Taxation within thirty days (now ninety days) or by filing an appeal with the Tax Court within ninety days from the date of the assessment.). Thus, the refund avenue is only available in self-assessed taxes such as the Corporation Business Tax, Corporation Income Tax, Estate Tax, Gross Income Tax, Petroleum Products Gross Receipts Tax, Savings Institution Tax, Sales and Use Taxes, Tobacco Products Wholesale Sales and Use Tax, and the Transfer Inheritance Tax. This is because the refund procedure is meant to be utilized by individuals and companies who discover on their own that they have calculated and paid too much in state tax. See generally Black Whale, supra, 15 N.J. Tax 338. Here, we are dealing with the Cigarette Tax. The Cigarette Tax, through its reference of the State Uniform Procedure Tax, makes appeals for assessments the exclusive remedy for the taxpayer.
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