Original WP 5.1 Version
This case can also be found at 15 N.J. Tax 498.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
DOCKET NO. 010542-94
MARY E. JACKSON, )
)
Plaintiff, )
)
v. ) OPINION
)
TOWNSHIP OF NEPTUNE, )
)
Defendant. )
Decided March 27, 1996
Mitchell J. Ansell for plaintiff
(Ansell, Zaro, Bennett & Grimm)
Donald L. Beekman for defendant
(Beekman & Missett)
RIMM, J.T.C.
This is a local property tax matter in which plaintiff,
claiming that she is the surviving spouse of a 100" permanently
disabled veteran, seeks exemption from local property taxation for
her home under N.J.S.A. 54:4-3.30(b). The subject property is a
single family residence located at 300 West End Avenue, Neptune
Township. The property is designated as block 302.21, lot 1 on the
municipal tax map.
Plaintiff, Mary E. Jackson, married James Jackson on April 20,
1965. In December of 1967, they purchased the subject property and
lived there together. They owned the property jointly, as tenants
by the entirety. In June of 1972, the United States Veterans'
Administration declared James Jackson to be a 100" disabled
veteran. As a result of that government declaration and pursuant
*
to N.J.S.A. 54:4-3.30(a), James Jackson's residence became exempt
from property taxes beginning in 1973 and was exempt for the tax
year 1993.
By a deed dated January 21, 1993, James Jackson and Mary E.
Jackson jointly conveyed the subject property to plaintiff, Mary E.
Jackson, individually. On February 16, 1993, after almost twenty-eight years of marriage, plaintiff obtained a divorce from bed and
board from James Jackson pursuant to N.J.S.A. 2A:34-3. Both
plaintiff and James Jackson continued to live together for at least
some of the time until James Jackson's death in April, 1993. At
the present time, plaintiff lives by herself in the subject
property.
For the 1994 tax year, defendant, Township of Neptune, denied
an exemption from local property taxation for plaintiff's property
and assessed the subject property as follows:
Land $ 40,000
Improvements 91,800
Total $ 131,800 .
Plaintiff then filed a petition of appeal with the Monmouth County
Board of Taxation seeking exemption for the subject property. In
a memorandum of judgment dated June 28, 1994, the Monmouth County
Board of Taxation denied plaintiff's exemption request. On an
attached sheet explaining the basis for the judgment, the County
Board noted that the marital home had been transferred to plaintiff
in January of 1993.See footnote 1
On September 13, 1994, plaintiff filed a complaint with the
Tax Court of New Jersey demanding judgment exempting her property
from local property taxes. On September 18, 1995, plaintiff filed
a motion for summary judgment with the Tax Court, seeking a
determination that the subject property is exempt from local
property taxation under N.J.S.A. 54:4-3.30(b).
In her motion for summary judgment, plaintiff asserts that
there is only one legal issue before the court. Plaintiff claims
that, while she did obtain a divorce from bed and board from James
Jackson, the judgment had no effect on her legal status as James
Jackson's wife. Plaintiff argues that she is James Jackson's widow
and therefore qualifies for exemption under N.J.S.A. 54:4-3.30(b),
as his surviving spouse.
Defendant does not dispute any of the facts in this case, but
contends that there are two legal issues before the court.
Defendant argues that, when plaintiff obtained the divorce from bed
and board from James Jackson, she ceased to be his wife and cannot
now qualify as his surviving spouse under the exemption statute.
Defendant also contends that, following the transfer of the subject
property from the joint ownership of plaintiff and her husband to
the sole ownership of plaintiff in January of 1993, the property no
longer qualified for an exemption because it was no longer owned by
a permanently disabled veteran. Defendant asserts that since there
was no exemption available to James Jackson upon his death, there
is no exemption available to plaintiff.
The Legislature has established both absolute divorce and
divorce from bed and board in New Jersey. N.J.S.A. 2A:34-2
establishes the requirements for a judgment of absolute divorce.
N.J.S.A. 2A:34-3 sets out the requirements for a judgment of
divorce from bed and board. In Lavino v. Lavino,
23 N.J. 635
(1957), the New Jersey Supreme Court explained that the difference
between the two types of divorce was that "[a]bsolute divorce
dissolves the marital bond and all dower rights are barred. In
[divorce from bed and board] the marital bond subsists...." Id. at
639 (citations omitted); Weinkrantz v. Weinkrantz
129 N.J. Super. 28, 32 (App. Div. 1974); Mueller v. Mueller,
95 N.J. Super. 244,
247 (App. Div. 1967) (Divorce from bed and board is not a true
divorce since it does not dissolve the bonds of matrimony but
merely decrees a judicial separation.). Significantly, in order to
remarry after having obtained a judgment of divorce from bed and
board, the parties must apply to the court for conversion of the
bed and board divorce to an absolute divorce. SeeN.J.S.A. 2A:34-3;
Rudin v. Rudin,
104 N.J. Eq. 524, 525 (Ch. 1929).
The primary purpose for obtaining a divorce from bed and board
is to terminate the marital obligations of cohabitation and
support. Lavino, supra at 639. Divorce from bed and board is
"[t]he closest analogy to a `legal separation' provided in New
Jersey divorce laws...." 1 Gary N. Skoloff & Laurence J. Cutler,
New Jersey Family Law Practice § 2.6 at 585 (7th ed. 1994). A
married couple might choose to obtain a judgment of divorce from
bed and board rather than an absolute divorce for religious
reasons. They may no longer wish to live together, but their
religious faith may prevent the couple from officially dissolving
the bonds of matrimony.
Here, the facts before the court suggest that plaintiff and
her husband obtained a divorce from bed and board in an attempt to
protect plaintiff's rights to certain veteran-related benefits.
These benefits included medical insurance, commissary rights, and
the veteran's dwelling tax exemption at issue in this case. N.J.S.A. 54:4-3.30, the veteran's dwelling tax exemption
statute, provides, in pertinent part, as follows:
a. The dwelling house and the lot or curtilage
whereon the same is erected, of any citizen
and resident of this State, now or hereafter
honorably discharged or released under honorable
circumstances, from active service, in time of
war, in any branch of the Armed Forces of the
United States who has been or shall be declared
by the United States Veterans Administration or
its successors to have a service-connected
disability ... declared by the United States
Veterans Administration or its successor to be
a total or 100" permanent disability... shall be
exempt from taxation....
b. The surviving spouse of any such citizen and
resident of this State who at the time of death
was entitled to the exemption provided under
this act, shall be entitled, on proper claim
made therefor, to the same exemption as the
deceased had, during the surviving spouse's
widowhood or widowerhood, as the case may be,
and while a resident of this State, for the time
that the surviving spouse is the legal owner
thereof and actually occupies the said dwelling
house or any other dwelling house thereafter
acquired.
Since its enactment in 1948, N.J.S.A. 54:4-30 has undergone
ten different amendments by the Legislature. The most recent
amendment occurred in 1985. At no time has the Legislature ever
indicated that a divorce from bed and board disqualified the spouse
of a veteran from exemption under this provision. This treatment
is unlike that accorded by the Legislature to spouses who have
obtained divorces from bed and board and who seek an elective share
from a deceased spouse's estate. Under those circumstances, the
Legislature made clear through N.J.S.A. 3B:8-1 that, where a
married couple obtains a judgment of divorce from bed and board and
the couple has "ceased to cohabit as man and wife," the surviving
spouse cannot qualify for a right of election from the estate of
the deceased spouse in New Jersey.See footnote 2 That provision was enacted in
1981. Similarly, in N.J.S.A. 54:4-3.30, the Legislature could have
provided for the disqualification from exemption of a surviving
spouse who had obtained a divorce from bed and board. The
Legislature has not made that choice.
Given the historical notion recognized by New Jersey courts
that a divorce from bed and board does not sever the bonds of
matrimony, as well as the lack of any specific statutory
disqualification, I find that plaintiff would be the surviving
spouse of James Jackson for the purposes of N.J.S.A. 54:4-3.30.
Nevertheless, despite what would be plaintiff's status as a
surviving spouse under the exemption statute, I still must deny
exemption in this case. By the January 21, 1993 deed, plaintiff
and her husband transferred the subject property from their joint
ownership as tenants by the entirety to the sole ownership of
plaintiff. After that transfer took place, James Jackson no longer
owned the subject property, and the property no longer qualified
for exemption from local property taxation. Since James Jackson no
longer had the right to an exemption, there was no exemption to
transfer to plaintiff upon James Jackson's death. Cf.Garma v. Tp.
of Lakewood,
14 N.J. Tax 1 (Tax 1994) (Since the New Jersey
exemption was not available to the husband at the time of his
death, it is not available to the surviving spouse.).
In General Trading Co. v. Director, Div. of Taxation,
83 N.J. 122 (1980), dealing with a case under the Corporate Business Tax
Act, N.J.S.A. 54:10A-1 to -40, the New Jersey Supreme Court
explained that "a voluntary business decision `is to be given its
tax effect in accord with what actually occurred and not in accord
with what might have occurred.'" Id. at 136 (quoting Commissioner
v. National Alfalfa Dehydrating and Milling Co.,
417 U.S. 134, 148,
94 S.Ct. 2128, 2137,
40 L.Ed.2d 717, 727 (1975)). There is no
reason why the same concept should not apply to local property
taxation under Title 54. SeeCigolini Assocs. v. Fairview Bor.,
208 N.J. Super. 654, 665 (App. Div. 1986) (Taxpayer was required to
bear the property tax consequences of its voluntary business
decision to convert a building from apartments to condominiums.).
Here, plaintiff and her husband structured their affairs in
a way that precludes exemption under N.J.S.A. 54:4-3.30(b).
It is generally accepted that exemptions from local property
taxation must be strictly construed because an exemption from
taxation is a departure from the equitable principle that all
taxpayers should bear their just and equal share of the public
burden of taxation.
[St. Luke's v. Peapack & Gladstone Bor.,
11 N.J. Tax 76, 80
(Tax 1990) (citing Princeton Univ. Press v. Princeton, 35
N.J. 209, 214 (1961)).] Cf.Cheyenne Corp. v. Tp. of Byram,
248 N.J. Super. 588, 594 (App.
Div. 1991) (Taxpayers chose to utilize different corporate
structures to purchase and hold separate tracts of land and could
not then aggregate income from the separate tracts to qualify for
farmland assessment.).
Plaintiff's motion for summary judgment is denied. Further,
since there is no dispute as to the quantum of the assessment, and,
since it has now been determined that plaintiff is not entitled to
the exemption that she claims, no further proceedings are necessary
in this case. Thus, the complaint is dismissed and judgment will
be entered accordingly.
Footnote: 1 The actual form of the County Board judgment appears to be
in error. The municipality has in fact assessed the property for
$131,800 for the 1994 tax year. Both parties agree that the
correct result of the County Board judgment was to sustain that
assessment. Therefore, the issue before the court is plaintiff's
right to have her property exempted from local property taxation
for 1994.
Footnote: 2 N.J.S.A. 3B:8-1 provides in full as follows:
Elective share of surviving spouse of person dying domiciled
in this State; conditions
If a married person dies domiciled in this State,
on or after May 28, 1980, the surviving spouse
has a right of election to take an elective share
of one-third of the augmented estate under the
limitations and conditions hereinafter stated,
provided that at the time of death the decedent
and the surviving spouse had not been living
separate and apart in different habitations or
had not ceased to cohabit as man and wife, either
as the result of judgment of divorce from bed and
board or under circumstances which would have
given rise to a cause of action for divorce or
nullity of marriage to a decedent prior to his
death under the laws of this State.
