Summary of a Recent
Judicial Development in
Estate Planning and Taxation

New Jersey Tax Court Sets Aside Agricultural
Land Valuation

Joshua T. Crain
National AgLaw Center Graduate Assistant

In Van Vugt v. Pequannock Township, 20 N.J. Tax 129 (N.J. Tax Ct. 2002), the Tax Court of New Jersey granted plaintiffs' summary judgment motion because the defendant tax assessor did not follow regulatory procedures for valuing the plaintiffs' agricultural property. See id. The plaintiffs were engaged in floricultural operations on their properties. See id. The defendant assessed their properties for the tax year at issue using an income approach that he created, rather than the guidelines set forth by the New Jersey State Farmland Evaluation Advisory Committee (Committee). See id. The court explained that regulations promulgated by the Director of the Division of Taxation (Director) determine the tax assessor's responsibilities when valuing agricultural land and that the Director recommends use by the assessor of the standards established by the Committee. See id. The court also explained that if the assessor does not use the standards set forth by the Committee, the assessor must submit to the Director reasons for not utilizing such standards along with "a detailed explanation as to the procedure and valuation standards to be applied in valuing qualified farmland." Id. at 134. The court noted that the assessor failed to follow any of the procedures outlined in the regulations. See id. It therefore granted the plaintiffs' motion for summary judgment and set aside the assessments of their properties. See id.

The case was decided on May 17, 2002; this summary was posted Apr. 8, 2005.