Opinion ID: 222315
Heading Depth: 3
Heading Rank: 2

Heading: Each person required to collect a

Text: tax imposed by the ordinance shall be personally liable for the tax imposed, collected[,] or required to be collected hereunder. Any such person shall have the same right in respect to collecting the tax from a customer as if the tax were a part of the rent 22 and payable at the same time; provided, however, that the chief fiscal officer of the municipality shall be joined as a party in any action or proceeding brought to collect the tax. N.J. Stat. Ann. § 40:48F-3. Lyndhurst argues this provision demonstrates that the State legislature did not give the Director the exclusive right to enforce its hotel occupancy tax. We disagree for reasons already stated by the District Court. Properly understood, there are two separate “collections” under the Enabling Act. First, there is a collection of the tax from the customer by the hotel operator. Second, there is a collection of all related taxes from the hotel operator by the Director. Importantly, each hotel operator is required to remit any taxes owed to the Director, whether the operator actually receives the amount owed from its customers or not. Under § 40:48F-3, the hotel operator is “personally liable” for this tax revenue, and that provision simply permits the operator to bring suit directly against delinquent customers for the amount owed. As such, § 40:48F-3 covers a hotel operator’s power to sue for a fixed amount owed (but unpaid) by a customer, not a municipality’s power to bring suit on its own to enforce its ordinance directly. Finally, Lyndhurst also argues that it has a right to enforce its hotel occupancy tax based on its general police 23 powers. Under N.J. Stat. Ann. § 40:48-1, the State legislature granted municipalities the right to “make, amend, repeal[,] and enforce ordinances to . . . [m]anage, regulate[,] and control the finances and property, real and personal, of the municipality.” Lyndhurst asserts that its hotel occupancy tax is an ordinance relating to the “manage[ment], regulat[ion][,] and control” of its finances, which Lyndhurst may “enforce” on its own, without the assistance of the Director. However, under New Jersey law there is a “clear distinction between the power of taxation for revenue and police powers which are granted for the maintenance of order and the administration of the internal affairs of a municipality.” State v. Hoboken, 41 N.J.L. 71, 78-79 (1879); see also Taxi’s, Inc., 373 A.2d at 723 (distinguishing a municipality’s power to tax from its general police powers). Hence, a grant of power under a municipality’s general police powers does not necessarily affect its powers of taxation. Moreover, a municipality’s police powers are still limited by “the laws of [New Jersey],” N.J. Stat. Ann. § 40:48-1, which include the Enabling Act. And, “[w]here the legislature has provided a special method for the collection of taxes,” as in this case, that “is ordinarily an exclusive procedure, and remedies based upon general legal rules may not be invoked.” Murphy, 34 A.2d at 783.12 12 Lyndhurst contends as well that N.J. Stat. Ann. § 40:48-1 lends additional textual support to its argument that it can sue to enforce its own ordinances. This provision reads as follows: Nothing in this act shall be construed to abrogate or 24 In the end, we believe that the Enabling Act provided Lyndhurst with the power to enact its hotel occupancy tax, but not to enforce it directly. This enforcement power was given to the Director alone (though assisted by the Attorney General), and included the exclusive right both to determine the amount of tax due and then to collect that amount. As such, it was for the Director—not Lyndhurst—to determine whether the difference between the wholesale rate and the retail rate was taxable under Lyndhurst’s hotel occupancy tax. Since Lyndhurst is not given a similar enforcement power, it is in effect attempting to share, if not take over, the Director’s role as exclusive enforcer of this tax regime—a role consciously delegated by the State legislature to the Director (aided by the Attorney General) and not to Lyndhurst. Once made, it is not our role to second-guess such a legislative determination—especially one made by the legislature of a sovereign state. Viewed this way, this federal action is an attempted end-run around the exclusive enforcement regime enacted by impair the powers of the courts or of any department of any municipality to enforce any provisions of its charter or its ordinances or regulations, nor to prevent or punish violations thereof; and the powers conferred by this act shall be in addition and supplemental to the powers conferred by any other law. The stumbling block is again that the State legislature never granted Lyndhurst the power to enforce its hotel occupancy tax. 25 the New Jersey legislature, with Lyndhurst asking us to insert ourselves into this dispute as a means of circumventing the Director. We refuse to do so.