Senator CHRISTOPHER "KIP" BATEMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Concerns statute of limitations for filing of estate tax refund claim for certain settlements reached with Continuing Care Retirement Community.
CURRENT VERSION OF TEXT
An Act concerning the statute of limitations for the filing of an estate tax refund claim for certain settlements reached with a Continuing Care Retirement Community, amending R.S.54:38-3.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. R.S.54:38-3 is amended to read as follows:
54:38-3. a. If, subsequent to the determination of the tax due under this chapter, the amount of the Federal estate tax shall be decreased and the amount of the Federal credit correspondingly reduced by reason of any corrected assessment or redetermination, the tax due hereunder shall be reduced accordingly upon satisfactory proof submitted to the State Tax Commissioner, and, if the tax due hereunder shall have theretofore been paid into the State treasury, the Comptroller of the Treasury, on satisfactory proof of such fact submitted to the State Tax Commissioner, and duly certified by him to the Comptroller, shall draw his warrant on the State Treasurer in favor of the executor, administrator, trustee, person or corporation who has paid said tax, or who may be lawfully entitled to receive the same, for the amount of such tax excessively paid and said warrant shall be paid by the State Treasurer out of any appropriation for the refund of transfer inheritance taxes the same as warrants for the refund of such taxes under the transfer inheritance tax statutes of this State are paid. The foregoing provisions respecting refund shall apply with the same force and effect to any other payments determined by the State Tax Commissioner to have been excessively made under this chapter.
b. All applications for the refund of taxes claimed to have been excessively or erroneously paid hereunder must be filed with the State Tax Commissioner within three years from the date of payment.
c. (1) Notwithstanding subsection b. of this section, an application for the refund of taxes claimed to have been excessively or erroneously paid with respect to amounts received by the decedent’s estate in a settlement, whether by suit or agreement, with the decedent’s Continuing Care Retirement Community may be made within three years from the date of payment or from the date of the settlement, whichever is later, but an application for the refund of taxes shall not be made if the settlement occurs more than 20 years after the date of the decedent’s death.
(2) As used in this subsection, a “Continuing Care Retirement Community” is a retirement community subject to the provisions of the “Continuing Care Retirement Community Regulation and Financial Disclosure Act,” P.L.1986, c.103 (C.52:27D-330 et seq.).
(cf: P.L.1944, c.75, s.1)
2. This act shall take effect immediately and shall apply retroactively to the estate of each resident decedent dying on or after January 1, 2016.
The bill extends the statute of limitations for filing an estate tax refund claim in the limited circumstance where the application for a refund concerns a settlement amount received from the decedent’s Continuing Care Retirement Community (CCRC).
Current law provides that an estate tax refund claim must be made within three years of payment of the estate tax. However, the strict time limit on filing a refund claim imposes a burden on estates which are able to reach settlements with the decedent’s CCRC only after the expiration of the three year statute of limitations. In this instance, the estates are harmed not only by their protracted battle with the CCRC, but also by their inability to file a refund claim on overpaid estate tax. This bill will allow estates to file an estate tax refund claim after settlement with a CCRC so long as the settlement is reached within 20 years of the date of the decedent’s death. The bill defines a CCRC as a retirement community which is subject to the provisions of the “Continuing Care Retirement Community Regulation and Financial Disclosure Act,” P.L.1986, c.103 (C.52:27D-330 et seq.).