The New Jersey Tax Court has ruled that Hunterdon Medical Center's appeal regarding property taxes will be limited due to its failure to provide requested income and expense data. This decision affects the medical center's ability to contest its property assessment for the 2025 tax year. The ruling emphasizes the importance of compliance with Chapter 91, which governs how income-producing properties are assessed for tax purposes.

The case, filed under docket number 005101-2025, arose after the Township of Raritan sought to limit the medical center's appeal based on its non-response to a request for financial information. This ruling is significant as it clarifies the conditions under which property owners must disclose income data to tax assessors, a requirement that can impact their ability to appeal property valuations.

Background

Hunterdon Medical Center owns a medical office building located at 121 Highway 31 in Raritan Township. The building is identified as Block 18.01, Lot 12.02 on local tax maps. In 2023, the medical center occupied the building alongside a plastic surgeon's office and SAFE, a non-profit organization focused on domestic violence prevention. While the plastic surgeon paid rent for part of the year, SAFE only contributed a nominal rent of $1 annually based on an informal agreement.

On May 6, 2024, the township's assessor sent a Chapter 91 request to Hunterdon Medical Center, seeking income and expense data for the entire year of 2023. When the center did not respond, the assessor sent a second request via certified mail on October 29, 2024. Still, Hunterdon Medical Center failed to provide the requested information.

After the medical center filed a tax appeal for the 2025 tax year, Raritan Township filed a motion to limit the appeal based on the medical center's non-compliance with the Chapter 91 request. This law, enacted in 1979, aims to ensure that property owners disclose income information that may affect property valuations, thus preventing taxpayers from withholding information during appeals.

The Ruling

The Tax Court ruled that Hunterdon Medical Center's failure to provide the requested income and expense data would limit its appeal. The court stated, "the failure to provide income and expense data for the period specified by a reasonable Chapter 91 request will limit the appeal." The ruling emphasized that the property in question was deemed income-producing due to the occupancy of the plastic surgeon's office during part of 2023.

The judge, identified as Cimino, noted that the medical center's assertion that the property was not income-producing based on the nominal rent paid by SAFE was not sufficient. The court clarified that the income-producing status of the property must be determined over a period, not just a single date, and that the medical center's failure to respond to the Chapter 91 request meant it could only contest the reasonableness of the assessment.

Impact

This ruling has significant implications for property owners in New Jersey, particularly those with income-producing properties. It reinforces the necessity for compliance with Chapter 91 requests, which are crucial for accurate property assessments. Property owners who fail to respond to such requests may find their appeals limited, facing a higher burden of proof to contest their property valuations.

The decision also highlights the importance of understanding what constitutes an income-producing property. The court's ruling suggests that even nominal rental agreements can contribute to a property's income status. This clarification may influence how property owners report income and expenses in future assessments.

What's Next

Hunterdon Medical Center may seek to appeal this ruling, but the court has limited the scope of its appeal to a reasonableness hearing. There are no indications of related cases pending at this time. The outcome of this case may influence how similar disputes are handled in the future, particularly regarding compliance with Chapter 91 requests.