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

Heading: The Enforcement Power

Text: Once Lyndhurst passed its hotel occupancy tax, the Enabling Act also provided for a specific enforcement regime. By the terms of the statute, only the Director—a State of New Jersey official—is given the explicit right to enforce Lyndhurst’s hotel occupancy tax: “The Director of the Division of Taxation shall collect and administer any tax imposed pursuant to the provisions of [§ 40:48F-1].” Id. § 40:48F-5 (emphasis added). Interestingly, the Enabling Act provides a distinct enforcement regime for cities of the “first class” and those of the “second class” with an international airport—as these municipalities may enforce directly their local hotel occupancy taxes. See id. § 40:48E-3 (outlining the enforcement regime for cities of the “first class” and cities of the “second class” with international airports). The same enforcement power is not given to other “second class” cities like Lyndhurst. As noted, this power resides with the Director. “In carry[ing] out” his authority to enforce Lyndhurst’s hotel occupancy tax, the Director is given “all the powers granted in” the Sales and Use Tax Act. Id. § 40:48F-5. This includes the power to “determine” the amount of tax owed by a taxpayer. Id. § 54:32B-19 (emphasis added). Indeed, the Act provides that, “[i]f a return required . . . is not filed, or if a return when filed is incorrect or insufficient, the amount of tax due shall be determined by the [D]irector from such information as may be available.” Id. (emphasis added). 8 “[S]uch determinations shall finally and irrevocably fix the tax unless the person against whom it is assessed . . . shall apply to the [D]irector for a hearing, or unless the [D]irector of his own motion shall redetermine the same.” Id. The Act also includes a specific mechanism for dealing with delinquent taxpayers: “Whenever any person required to collect tax shall fail to collect or pay over any tax[,] . . . the Attorney General shall, upon the request of the [D]irector, bring or cause to be brought an action to enforce the payment of same on behalf of the State of New Jersey . . . .” Id. at § 54:32B-22(a). In the end, the question remains whether this explicit grant of enforcement power to the Director (aided by the Attorney General) precludes Lyndhurst from bringing its own enforcement action against private parties in federal court.