Opinion ID: 1537924
Heading Depth: 1
Heading Rank: 4

Heading: Holmdel's Tax Assessment

Text: In 1998, in view of the perceived privatization of the Arts Center, Holmdel's tax assessor determined that the facilities subject to the GSAC and Bott agreements were no longer eligible for property tax exemption under the Highway Act's immunity provision, N.J.S.A. 27:12B-16 (repealed). The tax assessor did not assess any tax against facilities or property not implicated by the Bott and GSAC agreements, such as the New Jersey Vietnam Veterans' Memorial, the Telegraph Hill Nature Area, picnic areas, Highway Authority maintenance and administration buildings, and State Police facilities. Holmdel concedes that those facilities are tax exempt. For 1996, the assessor imposed an omitted added assessment of $14,261,200 for the combined amphitheater and reception center complex. See N.J.S.A. 54:4-63.3 (defining added assessment); N.J.S.A. 54:4-63.12 (permitting imposition of omitted added assessment). For 1997, Holmdel imposed an added assessment in the same amount, and, for 1998, Holmdel imposed a regular assessment of $200. In 1998, both Holmdel and the Authority appealed those tax assessments. The Authority claimed that the assessed property and facilities were statutorily exempt from property taxation, and Holmdel sought an increase in the amount of each assessment. [2]
In 1999, the Tax Court granted the Authority's motion for summary judgment, holding that the Arts Center was entitled to tax immunity. The Appellate Division reversed and remanded for a determination whether the amphitheater's use under the GSAC lease coincided with the use that the Legislature envisioned in 1968; whether the reception center, completed in 1989, was contemplated by the Legislature in 1968; and, if so, whether the use of the reception center under the Bott agreement is too far removed from the Legislature's initially-contemplated use to warrant tax immunity. Twp. of Holmdel v. N.J. Highway Auth., 329 N.J.Super. 410, 431-32, 748 A. 2d 128 (App.Div.2000). On remand, the Tax Court concluded that the amphitheater and reception center were significantly different, physically and in [their] operation, than the Legislature contemplated in 1968. Twp. of Holmdel v. N.J. Highway Auth., 22 N.J.Tax 428, 451-52 (2005). The Tax Court held that the reception center was subject to tax for all years in question and that the amphitheater was subject to tax beginning in 1997, the first year for which the GSAC lease was actually operative. Id. at 466. Thus, the court held that the reception center and amphitheater were both subject to taxation for 1997, 1998, 2000, 2001, 2002, and 2004, and that, for 1996, only the reception center was taxable. Ibid. On appeal, the Appellate Division summarily upheld the Tax Court's ruling. Twp. of Holmdel v. N.J. Highway Auth., 388 N.J.Super. 36, 40, 905 A. 2d 900 (App.Div. 2006). Both parties sought leave to file an interlocutory appeal, which we granted. 188 N.J. 570, 911 A. 2d 64 (2006).