Constitution: Due Process Clause

The New Jersey Tax Court rejected a taxpayer’s due process claim finding that the Division of Taxation properly issued the notice of assessment. The taxpayer made three arguments: (1) that the Division issued the assessment in the name of the predecessor corporation instead of the successor corporation, (2) that the assessment was addressed to the wrong zip code, and (3) that the taxpayer’s third-party mailroom routed the assessment to the wrong location. In addressing each of these claims, the court reasoned that the taxpayer’s officer executed prior statute waivers in the name of the predecessor corporation and that the assessment was delivered to the proper address where agents of the taxpayer accepted and signed the mail return receipt card. Although there was evidence that the taxpayer’s mailroom routed the assessment to a different location, the court found that the taxpayer’s neglect was not excusable and that it was responsible for its organization’s failure to take prompt action to respond to the assessment. (Merrill Lynch Credit Corporation v. Division of Taxation, Dkt. No: 004230-2017 (NJ Tax Ct. Sep. 28, 2018) WL 4718875).

A New York State Administrative Law Judge ruled that the retroactive application of amendments to the state’s Empire Zones statute—disqualifying a taxpayer from the tax reduction credits—did not violate the taxpayer’s constitutional due process rights. Acknowledging that the stated public purposes of curtailing perceived abuses and raising revenue were better accomplished in prospective legislation, the Division nevertheless found that the application of statutory amendments to the tax year in which the amendments were enacted was an “extremely short period of retroactivity” that outweighs the lack of a public purpose. (In the Matter of the Petition of NRG Energy, Inc., Dkt. No. 826921 (N.Y. Div. Tax App. 11/08/2018)).