ASSEMBLY, No. 846

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblymen COTTRELL and MALONE

 

 

An Act concerning deductions from real property taxes for citizens and residents of this State of the age of 65 or more years, or less than 65 years of age who are permanently and totally disabled, amending P.L.1963, c.172, P.L.1964, c.255 and P.L.1976, c.129 and supplementing chapter 4 of Title 54 of the Revised Statutes.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. Section 1 of P.L.1963, c.172 (C.54:4-8.40) is amended to read as follows:

    1. As used in this act:

    (a) "Income" means all income from whatever source derived including, but not limited to, realized capital gains except for a capital gain resulting from the sale or exchange of real property, of shares in a cooperative or mutual housing corporation entitling a tenant-stockholder to occupy a residential unit therein, and of a manufactured home in a mobile home park, owned and used by the taxpayer as his principal residence, and on which he received a deduction allowed by this act, and, in their entirety, pension, annuity and retirement benefits. For the purpose of claiming a deduction from taxes for any tax year, pursuant to this act, "income" shall be deemed to be equal in amount to the income which the taxpayer reasonably anticipates he will receive during the tax year for which such deduction is claimed and shall be exclusive of benefits under any one of the following:

    (1) The federal Social Security Act and all amendments and supplements thereto;

    (2) Any other program of the federal government or pursuant to any other federal law which provides benefits in whole or in part in lieu of benefits referred to in, or for persons excluded from coverage under, (1) hereof including but not limited to the federal Railroad Retirement Act and federal pension, disability and retirement programs; or

    (3) Pension, disability or retirement programs of any state or its political subdivisions, or agencies thereof, for persons not covered under (1) hereof; provided, however, that the total amount of benefits to be allowed exclusion by any owner under (2) or (3) hereof shall not be in excess of the maximum amount of benefits payable to, and allowable for exclusion by, an owner in similar circumstances under (1) hereof.

    (b) "Permanently and totally disabled" means total and permanent inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment, including blindness. For purposes of this subsection, "blindness" means central visual acuity of 20/200 or less in the better eye with the use of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees shall be considered as having a central visual acuity of 20/200 or less.

    (c) "Pretax year" means the calendar year immediately preceding the "tax year."

    (d) "Post-tax year" means the calendar year immediately following the "tax year."

    (e) "Resident" means one legally domiciled within the State of New Jersey for a period of one year immediately preceding October 1 of the pretax year. Mere seasonal or temporary residence within the State, of whatever duration, shall not constitute domicile within the State for the purposes of this act. Absence from this State for a period of 12 months shall be prima facie evidence of abandonment of domicile in this State. The burden of establishing legal domicile within the State shall be upon the claimant.

    (f) "Deduction" means the senior citizen's deduction or the deduction for the permanently and totally disabled against the taxes or annual municipal service fees payable by any person, allowable pursuant to this act.

    (g) "Tax year" means the calendar year in which the general property tax or annual municipal service fee is due and payable.

    (h) "Cooperative" means a housing corporation or association incorporated or organized under the laws of New Jersey which entitles a shareholder thereof to possess and occupy for dwelling purposes a house, apartment or other structure owned or leased by the corporation or association;

    (i) "Mutual housing corporation" means a corporation not-for-profit incorporated under the laws of New Jersey on a mutual or cooperative basis within the scope of section 607 of the "National Defense Housing Act," Pub.L.76-849 (42 U.S.C. § 1521 et seq.), which acquired a National Defense Housing Project pursuant to that act.

    (j) "Real property" and "property" includes a manufactured home installed in a mobile home park as defined in section 3 of the "Manufactured Home Taxation Act," P.L.1983, c.400 (C.54:4-1.4).

    (k) "Tax," "taxes," "taxation," and "tax assessed against real property" includes periodic charges by a cooperative or mutual housing corporation made upon its shareholders on account of property taxes and an annual municipal service fee imposed on manufactured homes installed in mobile home parks pursuant to the "Manufactured Home Taxation Act," P.L.1983, c.400 (C.54:4-1.2 et seq.).

    (l) "Taxpayer" includes a resident shareholder in a cooperative or mutual housing corporation and an owner of a manufactured home in a mobile home park who is required to pay a municipal service fee.

(cf: P.L.1989, c.252, s.1)

 

    2. Section 2 of P.L.1963, c.172 (C.54:4-8.41) is amended to read as follows:

     2. Every person, a citizen and resident of this State of the age of 65 or more years, or less than 65 years of age who is permanently and totally disabled, having an annual income not in excess of the limitations provided in this section and residing in a dwelling house owned by him which is a constituent part of his real property or residing in a dwelling house owned by him which is assessed as real property but which is situated on land owned by another or others, or residing as a tenant shareholder in a cooperative or mutual housing corporation, or residing in a manufactured home in a mobile home park, shall be entitled, annually, on proper claim being made therefor, to a deduction against the tax or taxes assessed against such real property, to an amount not exceeding the amount of said tax, the proportionate share of said tax attributable to his unit, or the sum provided in this section, whichever is the lesser, but no such deduction from taxes shall be in addition to any other deduction or exemption from taxes to which said person may be entitled, except a veteran's deduction provided under P.L.1963, c.171 (C.54:4-8.10 et seq.). A citizen and resident granted a deduction pursuant to this section may receive in addition any homestead rebate or credit provided by law.

    For the purposes of this section, the annual income limitation shall be: $5,000.00 for any year prior to 1981; $8,000.00 for the year 1981; $9,000.00 for the year 1982; and $10,000.00 for year 1983 and each year thereafter.

    The sum deducted pursuant to this section shall not exceed:

in any year prior to 1981, $160.00; in the year 1981, $200.00; in the year 1982, $225.00; and in the year 1983 and in each year thereafter, $250.00.

    For the purposes of this act:

    a. The income of a married person shall be deemed to include an amount equal to the income of the spouse during the applicable income year, except for such portion of that year as the two were living apart in a state of separation, whether under judicial decree or otherwise.

    b. The requirement of ownership shall be satisfied by the holding of a beneficial interest in the dwelling house where legal title thereto is held by another who retains a security interest in the dwelling house.

    c. A resident shareholder in a cooperative or a mutual housing corporation shall be deemed the owner of legal title to his proportionate share of the taxable value of the real property of the corporation for the purpose of establishing a claim.

(cf: P.L.1989, c.252, s.2)

 

    3. Section 4 of P.L.1976, c.129 (C.54:4-8.41a) is amended to read as follows:

    4. The surviving spouse of a deceased citizen and resident of this State who during his or her life received a real property tax deduction pursuant to this act shall be entitled, so long as he or she shall remain unmarried and a resident in the same dwelling house, cooperative or mutual housing corporation, or in the same manufactured home in the same mobile home park with respect to which said deduction was granted, to the same deduction, upon the same conditions, with respect to the same real property, notwithstanding that said surviving spouse is under the age of 65 and is not permanently and totally disabled, provided that said surviving spouse is 55 years of age or older at the time of the death of said citizen and resident.

(cf: P.L.1976, c.129, s.4)

 

    4. Section 4 of P.L.1963, c.172 (C.54:4-8.43) is amended to read as follows:

    4. An application for a deduction hereunder may be filed with the assessor of the taxing district on or before December 31 of the pretax year. If an application is approved by the assessor, he shall allow a deduction from the taxes assessed against the real property assessed to the claimant, or to the cooperative or mutual housing corporation, or to the owner of the mobile home park, as the case may be, as described therein and shall indicate upon the assessment list and duplicates the approval thereof in such manner as shall be prescribed by rules of the Director of the Division of Taxation together with the proportionate share of such property deemed to be owned by the claimant for the purposes of this act if he is not the sole owner thereof.

    Upon approval of the application for a tax deduction the tax collector shall note in his records the existence of a contingent liability for taxes in the amount of the deduction in the event the deduction is subsequently disallowed on the basis of the taxpayer's income, the transfer of title to the property to a person not entitled to such deduction, or on the basis of the failure to meet any other prerequisites required by this act for a tax deduction, which contingent liability shall be reported on any tax search made on the property for which the deduction was approved and on the records of the tax collector, and of the cooperative or mutual housing corporation or mobile home park owner, as the case may be.

    The application, if not filed with the assessor within the time aforementioned, may be filed with the collector during the tax year and upon approval by the collector of such application he shall determine the amount of the reduction in tax to which the claimant is entitled and shall allow said amount as an offset against the tax then remaining unpaid or shall provide that said amount be given as a credit to each residential shareholder or manufactured home owner, as the case may be. If the amount allowable as an offset shall exceed the amount of the tax of the claimant then unpaid for that tax year, or if the application for a tax deduction is not filed with the collector until after all taxes for the tax year have been fully paid, the claimant may make application to the governing body of the municipality constituting the taxing district for the refund of any tax overpaid, but without interest, and the governing body may, in its discretion, direct the return of any tax deemed by it to have been overpaid by reason of claimant's failure to make timely application for a tax deduction; provided, however, that no application for a tax deduction for any previous tax year shall be allowed by any assessor, collector or governing body. Where an application for a tax deduction is filed with and allowed by a collector he shall promptly transmit such application and all exhibits attached thereto, or a photostatic copy thereof, to the assessor of the taxing district. Upon receipt thereof the assessor shall review the application and if approved by him it shall have the same force as if originally filed with him.

(cf: P.L.1976, c.129, s.6)

 

    5. Section 5 of P.L.1963, c.172 (C.54:4-8.44) is amended to read as follows:

    5. Every fact essential to support a claim for a deduction hereunder shall exist on October 1 of the pretax year, except as in this section otherwise provided. Every application by a claimant therefor shall establish that he is or will be on or before December 31 of the pretax year 65 or more years of age or on that date was permanently and totally disabled, and that he was, on October 1 of the pretax year, (a) a citizen and resident of this State for the period required, (b) the owner of a dwelling house which is a constituent part of the real property for which the deduction is claimed, the owner of a dwelling house which is assessed as real property but which is situated on land owned by another or others, or residing as a tenant shareholder in a cooperative or mutual housing corporation, or an owner of a manufactured home in a mobile home park, (c) residing in said dwelling house, nonprofit cooperative or mutual housing corporation, or manufactured home. Said application shall also establish that his anticipated income, including the income of his or her spouse, for the tax year will not exceed the applicable annual income limitation set forth in section 2 of P.L.1963, c.172 (C.54:4-8.41). In the case of a claim for a deduction by a person who is permanently and totally disabled, said application shall include a physician's certificate verifying the claimant's permanent and total disability. The Director of the Division of Taxation may promulgate rules and regulations prescribing the form and content of the certificate.

    In the case of claims for a deduction authorized by section 4 of [this amendatory and supplementary act] P.L.1976, c.129 (C.54:4-8.41a), every application by a claimant therefor shall establish that he is or will be on or before December 31 of the pretax year 55 or more years of age and was 55 or more years of age at the time of the death of the decedent and unmarried and that he was, on October 1 of the pretax year, (a) a citizen and resident of this State for the period required, (b) the owner of a dwelling house which is a constituent part of the real property for which the deduction is claimed, or the owner of a dwelling house which is assessed as real property but which is situated on land owned by another or others, or residing as a tenant shareholder in a cooperative or mutual housing corporation, or an owner of a manufactured home in a mobile home park, (c) residing in said dwelling house, cooperative or mutual housing corporation, or manufactured home. Said application shall also establish that his anticipated income for the tax year will not exceed the applicable annual income limitation. The collector or the assessor of the taxing district as the case may be shall establish whether the deceased spouse of the claimant received a deduction.

(cf: P.L.1989, c.252, s.3)

 

    6. Section 5 of P.L.1964, c.255 (C.54:4-8.44a) is amended to read as follows:

    5. Every person who is allowed a deduction shall, except as hereinafter provided, be required to file with the collector of the taxing district on or before March 1 of the post-tax year a statement under oath of his income for the tax year and his anticipated income for the ensuing tax year as well as any other information deemed necessary to establish his right to a tax deduction for such ensuing tax year. The collector may grant a reasonable extension of time for filing the statement required by this section, which extension shall terminate no later than May 1 of the post-tax year, in any event where it shall appear to the satisfaction of the collector, verified by a physician's certificate, that the failure to file by March 1 was due to illness or a medical problem which prevented timely filing of the statement. In any case where such an extension is granted by the collector, the required statement shall be filed on or before May 1 of the post-tax year.

    Such statement shall be on a form prescribed by the Director of the Division of Taxation, in the Department of the Treasury and provided for the use of persons required to make such statement by the governing body of the municipality constituting the taxing district in which such statement is required to be filed and shall be mailed by the collector on or before February 1 of the post-tax year to each person within the taxing district who was allowed a deduction in the preceding year. Each collector may require the submission of such proof as he shall deem necessary to verify any such statement. Upon the failure of any such person to file the statement within time herein provided or to submit such proof as the collector deems necessary to verify a statement that has been filed, or if it is determined that the income of any such person exceeded the applicable income limitation for said tax year, his tax deduction for said tax year shall be disallowed. A notice of disallowance, on a form prescribed by the director, shall be mailed to that person by the collector on or before April 1 of the post-tax year or, where an extension of time for filing has been granted, no later than June 1, and his taxes to the extent represented by the amount of said deduction shall be payable on or before June 1 of the post-tax year or, where an extension of time for filing has been granted no later than 30 calendar days after the notice of disallowance was mailed, after which date if unpaid, said taxes shall be delinquent, constitute a lien on the property, and, in addition, the amount of said taxes shall be a personal debt of said person. In the case of a deduction for a dwelling house owned by the claimant which is assessed as real property but which is situated on land owned by another or others, or for a residential unit in a cooperative or mutual housing corporation, or for a manufactured home in a mobile home park, taxes remaining unpaid thereafter shall be delinquent and the amount of said taxes shall be a personal debt of said person. The amount of any delinquent taxes remaining unpaid from an owner of a manufactured home in a mobile home park shall, in addition, be deemed rent for eviction purposes.

    The amount of any lien and tax liability shall be prorated by the tax collector upon the transfer of title based on the number of days during the tax year that entitlement to the tax deduction is established. [The] A lien and tax liability shall be considered satisfied by the tax collector upon payment of the prorated amount for that portion of the tax year for which entitlement to the tax deduction is not established.

(cf: P.L.1985, c.505, s.1)

 

    7. Section 7 of P.L.1963, c.172 (C.54:4-8.46) is amended to read as follows:

    7. Where title to property as to which a deduction is claimed is held by claimant and another or others, either as coowners or tenants in common or as joint tenants, claimant shall not be allowed a deduction in an amount in excess of his proportionate share of the taxes assessed against said property, which proportionate share, for the purposes of this act, shall be deemed to be equal to that of each of the other tenants or coowners, unless it is shown that the interests in question are not equal, in which event claimant's proportionate share shall be as shown. Nothing herein shall preclude more than one tenant or coowner, whether title be held in common or joint tenancy, from claiming a deduction from the taxes assessed against the property so held, but no more than the equivalent of one full deduction in regard to such property shall be allowed in any year, and in any case in which the claimants cannot agree as to the apportionment thereof, such deduction shall be apportioned between or among them in proportion to their interest. Property held by husband and wife, as tenants by the entirety, shall be deemed wholly owned by each tenant, but no more than one deduction in regard to such property shall be allowed in any year. Right to claim a deduction hereunder shall extend to property the title to which is held by a partnership, to the extent of the claimant's interest as a partner therein, and by a guardian, trustee, committee, conservator or other fiduciary for any person who would otherwise be entitled to claim such deduction hereunder, but not to property the title to which is held by a corporation; except that a residential shareholder in a cooperative or mutual housing corporation shall be entitled to claim a deduction he is otherwise eligible to receive, to the extent of the proportionate share of the taxes assessed against the real property of the corporation, or any other entity holding title, attributable to his unit therein.

(cf: P.L.1989, c.252, s.4)

 

    8. (New section) a. When an application by a shareholder in a cooperative or mutual housing corporation is allowed, the assessor shall promptly notify the corporation, setting forth the amount of the deduction, and shall send a duplicate of the notice to the shareholder.

    b. The tax collector shall credit to each cooperative or mutual housing corporation the total amount of deductions allowed to its shareholders in each tax year against the taxes payable by the corporation in that year.

    c. A cooperative or mutual housing corporation shall credit upon its books each shareholder to whom a deduction has been allowed, and shall proportionately reduce the periodic charges made to him on account of taxes. Each statement of periodic charges presented to the shareholder shall distinctly indicate: (1) his proportional share of the corporation's taxes, without allowance for the deduction, and (2) the amount by which that share is reduced for the period covered by the statement; and a copy of the statement shall be filed with the tax collector.

 

    9. (New section) a. When an application by an owner of a manufactured home in a mobile home park is allowed, the assessor shall promptly notify the owner of the mobile home park in which the home is installed, setting forth the amount of the deduction, and shall send a duplicate of the notice to the manufactured home owner.

    b. The tax collector shall credit to each qualified manufactured home owner the amount of the deduction allowed against the annual municipal service fee imposed pursuant to the "Manufactured Home Taxation Act," P.L.1983, c.400 (C.54:4-1.2 et seq.). A mobile home park owner shall proportionately reduce the monthly collection of the municipal service fee from a qualified manufactured home owner.

 

    10. This act shall take effect immediately, but remain inoperative until a constitutional amendment, which allows the granting of the senior citizen's and disabled citizen's property tax deduction to manufactured home owners as provided in this act, is approved by the voters, and shall apply to the tax year next following the date of approval and thereafter.

 

 

STATEMENT

 

    This bill extends the senior citizen's and disabled citizen's $250 property tax deduction to qualified citizens and their widows who own manufactured homes, or mobile homes, installed in mobile home parks who are assessed a municipal services fee by municipal ordinance pursuant to the "Manufactured Home Taxation Act," P.L.1983, c.400 (C.54:4-1.2 et seq.). Under that act, mobile home owners in mobile home parks are not subject to real property taxation and are therefore not eligible to apply for the deduction. However, they can be assessed a municipal service fee to cover the cost of municipal and local services they receive, and should be treated as other property owners who may qualify for the deduction. Mobile homes not in mobile home parks, whether or not on land owned by the homeowner, are assessed for real property taxes and therefore are eligible for the deduction.

 

Extends the senior citizen's property tax deduction to certain qualified persons who reside in mobile home parks.