United Autoland, Inc. v. Director, Division of Taxation

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE TAX COURT
COMMITTEE OF OPINIONS

TAX COURT OF NEW JERSEY

Olde Historic Courthouse
KATHI F. FIAMINGO 120 High Street
JUDGE P.O. Box 6555
Mount Holly, New Jersey 08060
609 288-9500, Ext. 38303 Fax 609 288-9475

February 11, 2020

Jonathan P. Newcomb, Esq.
Spino & Newcomb, LLC
44 Cooper Street
Suite 105
Woodbury, New Jersey 08096

Michelline Capistrano Foster
Deputy Attorney General
Division of Taxation
Richard J. Hughes Justice Complex
25 Market Street
P.O. Box 106
Trenton, New Jersey 08625-0106

Re: United Autoland, Inc. v.
Director, Division of Taxation
Docket No. 013446-2018

Dear Counsel:

This letter constitutes the court’s opinion with respect to the Director, Division of

Taxation’s motion to dismiss plaintiff’s complaint with prejudice for lack of subject-matter

jurisdiction pursuant to R. 4:6-2(a). For the reasons explained more fully below, the Director’s

motion is granted.
I. Procedural History and Findings of Fact

United Autoland, LLC (“plaintiff”) is a used car dealership. Following an audit of

plaintiff’s business on November 6, 2017, the Division of Taxation (the “Division”) issued plaintiff

a Notice of Assessment, which plaintiff received on November 10, 2017. The Division assessed

Sales and Use Tax (“S & U”) and Corporate Business Tax (“CBT”), as well as associated penalties

and interest totaling $124,439.68 for the tax period commencing in the third quarter of tax year

2012 through 2016. The Notice of Assessment contained the following language:

If, after you review this notice you disagree with the Division, you
may submit a written protest and a request for a hearing (if a hearing
is desired) within 90 days of this notice.

On May 4, 2018, plaintiff mailed a letter to the Division protesting the Notice of

Assessment. This letter was mailed 175 days after receipt of the notice of assessment. On June

27, 2018, the Division sent plaintiff a Final Determination, in response to plaintiff’s protest. The

Final Determination confirmed that the Conference and Appeals Branch of the Division received

the letter from plaintiff, as well as advised the following:

Under the provisions N.J.S.A. 54:49-18, a request for a hearing must
be postmarked within a ninety (90) day period from the date of the
Division’s notice containing appeal rights. The Division’s notice(s)
containing appeals rights which was issued to you in this matter was
the November 6, 2017 Notice of Assessment, which was sent by
Certified Mail – Return Receipt Request [sic] on November 6, 2017.
Our records indicate this mailing was successfully delivered to you
on November 10, 2017 by the U.S. Postal Service to your residence
[sic] address of record on file with this Division.

Based on the foregoing, your 90-day appeal period expired February
05, 2018. Since a valid protest was not filed with this office within
ninety days of November 6, 2017, the request for hearing will not
be granted.

[See Hepp Cert., Division’s Ex. C.]

In addition, the Final Determination states:

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If you do not agree with the above determination regarding the
timeliness of the protest, you may file a complaint with the required
fee relative to this determination, which must be received within
(90) ninety days from the date of this notice, directly with the Tax
Court of New Jersey in accordance with the provisions of N.J.S.A.
54:51A-13 et seq.

[Ibid.]

On September 25, 2018, plaintiff filed a complaint in Tax Court. The Division now moves

to dismiss plaintiff’s complaint with prejudice pursuant to R. 4:6-2(a) on the basis that the

complaint was untimely filed, and thus the court lacks subject matter jurisdiction to consider the

merits of plaintiff’s tax appeal. Plaintiff has filed no opposition to the Division’s motion.

II. Conclusions of Law

N.J.S.A. 54:32B-21(a) of the Sales and Use Tax Act specifies that, “[a]ny aggrieved

taxpayer may, within 90 days after any decision, order, finding, assessment or action of the

Director of Taxation made pursuant to the provisions of this act, appeal therefrom to the tax court

in accordance with the provisions of the State Tax Uniform Procedure Law, R. S. 54:48-1 et seq.”

Furthermore, N.J.S.A. 54:32B-21(b) directs that “[t]he appeal provided by this section

shall be the exclusive remedy available to any taxpayer for review of a decision of the director in

respect of the determination of the liability of the taxpayer for the taxes imposed by this act.” Ibid.

In addition, the State Tax Uniform Procedure Law, at N.J.S.A. 54:49-18(a) provides:

If any taxpayer shall be aggrieved by any finding or assessment of
the director, he may, within 90 days after the giving of the notice of
assessment or finding, file a protest in writing signed by himself or
his duly authorized agent, certified to be true, which shall set forth
the reason therefor, and may request a hearing. Thereafter the
director shall grant a hearing to the taxpayer, if the same shall be
requested, and shall make a final determination confirming,
modifying or vacating any such finding or assessment.

[Ibid.]

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Finally, N.J.S.A. 54:51A-14(a) of the State Uniform Tax Procedure Law governing appeals

to the Tax Court requires that “all complaints be filed within 90 days after the date of the action

sought to be reviewed.”

The 90-day filing limitation is repeated in R. 8:4-1(b) which clearly states that

“[c]omplaints seeking to review actions of the Director of the Division of Taxation with respect to

a tax matter . . . shall be filed within 90 days after the date of the action to be reviewed.” The

ninety day time period is calculated from the “date of service of the decision or notice of the action

taken” R. 8:4-2(a). The statutory time periods incorporated in the New Jersey Court Rules are

jurisdictional. McMahon v. City of Newark, 195 N.J. 526, 530 (2008). They are not within the

“relaxation power of the Tax Court.” Pressler & Verneiro, Current N.J. Court Rules, Comment 1

on R. 8:4-1 (GANN) (2015) (citations omitted).

A “failure to file a timely appeal is a fatal jurisdictional defect” and if a plaintiff fails to

file within the prescribed time frame, that plaintiff is proscribed from an appeal in the Tax Court

and any consideration of its case on the merits. F.M.C. Stores v. Borough of Morris Plains, 100

N.J. 418, 425 (1985). The burden of timely filing falls squarely and solely upon the taxpayer.

Slater v. Dir., Div. of Taxation, 26 N.J. Tax 332, 334 (Tax 2012) citing Dougan v. Dir., Div. of

Taxation, 17 N.J. Tax 110 (App. Div. 1997).

The Supreme Court has noted that “[s]trict adherence to statutory time limitations is

essential in tax matters, borne of the exigencies of taxation and the administration of . . .

government.” F.M.C. Stores, supra, 100 N.J. at 425. Such time limitations “in tax statutes are

strictly construed in order to provide finality and predictability of revenue to state and local

government.” Bonanno v. Dir., Div. of Taxation, 12 N.J. Tax 552, 556 (Tax 1992) (citing

Pantasote, Inc. v. Dir., Div. of Taxation, 8 N.J. Tax 160, 164-166 (Tax 1988)).

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The Tax Court has repeatedly dismissed taxpayer’s appeals where the 90-day filing

limitation has not been observed. See, e.g., Slater v. Dir., Div. of Taxation, supra, 26 N.J. Tax

333-335; Off v. Dir., Div. of Taxation, 6 N.J. Tax 157, 164-166 (Tax 1996); People’s Express,

Inc. v. Dir., Div. of Taxation, 10 N.J. Tax 417, 424 (Tax 1989).

Here, the Director sent its Notice of Assessment on November 6, 2017. Plaintiff received

the notice on November 10, 2017. The Notice of Assessment clearly indicated that the plaintiff

had 90 days to protest the Director’s finding. It was not until May 4, 2018, 175 days after plaintiff

received the Notice of Assessment, that plaintiff mailed a protest to the Notice of Assessment.

Thus, on September 27, 2018, the Director sent a Final Determination to plaintiff. Within

the Final Determination the Director acknowledged receipt of plaintiff’s protest, but again

reiterated that it was untimely filed. Furthermore, the Final Determination confirmed the

Director’s finding in the Notice of Assessment that assessed Sales and Use Tax (“S & U”) and

Corporate Business Tax (“CBT”), as well as associated penalties and interest totaling $124,439.68

for the tax period commencing in the third quarter of tax year 2012 through 2016.

III. Conclusion

Plaintiffs’ failure to file a protest or complaint within 90 days of the action of the Director

is fatal to this court’s consideration of plaintiff’s complaint. The court lacks jurisdiction to

consider the merits of this action.

The Director’s motion to dismiss the complaint is granted. Judgment dismissing the

complaint will be entered accordingly.

Very truly yours,

_________________________________
Kathi F. Fiamingo, J.T.C.

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