New Jersey Announces Tax Amnesty Program
The New Jersey Division of Taxation recently announced a state tax amnesty period that will begin on May 4, 2009 and end on June 15, 2009. Authorized by a bill recently signed by Governor Jon S. Corzine, the amnesty program will apply to tax liabilities for returns due on or after January 1, 2002, and prior to February 1, 2009. Under the program, if a taxpayer makes payment during the amnesty period of all outstanding state taxes plus one-half of any interest due as of May 1, 2009, the State will waive all penalties, collection costs and the remaining one-half interest due. Taxpayers under criminal investigation for a State tax matter are not eligible for the program. Eligible taxpayers who fail to pay taxes owed during the amnesty period will be subject to a 5% “amnesty eligible” penalty in addition to all other penalties, interest, or collection costs.
Headquartered in Trenton for 40 years, Sterns & Weinroth is well positioned to address issues with the Division of Taxation and has helped clients navigate previous New Jersey tax amnesty programs, successfully negotiating with the Division on a variety of tax issues.
To learn how Sterns & Weinroth can assist you with the Tax Amnesty Program, please contact Richard K. Weinroth at 609-989-5032 or rweinroth@sternslaw.com.
Insurance Alert: Appellate Division Holds that a Passenger Injured in a Vehicle Covered by a “Special Policy” is Uninsured and Orders the UCJF to Provide Non-emergency PIP Benefits.
In the June 19, 2008 decision in Sanders v. Langemeier, et al., the Appellate Division rejected the arguments of the New Jersey Property-Liability Insurance Guaranty Association (“PLIGA”), administrator of the Unsatisfied Claim and Judgment Fund (“UCJF” or “Fund”), and held that an injured passenger of a driver covered by a special policy pursuant to N.J.S.A. 39:6A-3.3 is an “uninsured driver” entitled to personal injury protection (“PIP”) benefit payments through the Fund.
To read this Alert in its entirety, please click here. For more information, contact Doreen Piligian at 609.989.5047, or dpiligian@sternslaw.com.
Insurance Alert: Legislation Enacted Prohibiting Use of UM/UIM "Step-Down" Provisions in Certain Circumstances
On September 10, 2007, P.L. 2007, c. 163 was signed into law by Governor Corzine to prohibit the use of "step-down" clauses that limit uninsured and underinsured motorists coverage for policies issued to corporate or business entities. The law takes effect immediately.
This amendment to N.J.S.A. 17:28-1.1 is in response to the decision of the New Jersey Supreme Court in Pinto v. New Jersey Manufacturers Ins. Co., 183 N.J. 405 (2005), where the Court affirmed the use of a step-down clause in a commercial auto insurance policy that limited the amount of UM/UIM coverage in an employer's policy to the amount selected by the employee (or the employee's family member) in his or her personal auto policy.
In Pinto, the Court concluded that an employee may obtain UM/UIM coverage in the amounts in his or her employer's commercial auto policy, only if he or she is a "named insured." The Court thus imposed "on insurers, their agents, and brokers, a duty to inform employers about the necessity for such language (i.e., language asserting the employer's intention to have all employees considered named insureds under the policy), so that employers may make informed decisions about whether their employees will have the status of 'named insureds' under the employers' business automobile insurance policies." In prohibiting the use of step-down clauses in these policies, the new law eliminates this duty.
In order to comply with N.J.S.A. 17:28-1.1, as amended, insurers may have to change the language of their commercial auto policies as well as how they handle UM/UIM claims. The new law also may impact commercial auto insurance rates.
For more information, please contact Susan Stryker at 609.989.5035, or sstryker@sternslaw.com, or Doreen J. Piligian at 609.989.5047, or dpiligian@sternslaw.com.
Paid Family Leave Legislation Pending
The New Jersey State Senate is currently considering Paid Family Leave Legislation. Senate Bill 2249, sponsored by Senators Stephen M. Sweeney (D-3) and Barbara Buono (D-18), would allow virtually every employee in New Jersey to take up to 10 weeks of paid leave every year to care for sick family members, newborns and newly adopted children. Caring for sick family members includes providing psychological comfort and arranging third party care for the family member.
This bill is of concern to every employer in the State of New Jersey. The legislation applies to all private and governmental employers subject to the unemployment compensation law, including local governmental employees who choose to opt out of the State's Temporary Disability Insurance (TDI) program. The law does not contain exemptions for non-profits or small businesses and will apply whether a business has 1 or 1,000 employees. The program would be funded by expanding the State's TDI, through a .01% charge on the employee's portion of the taxes.
On Thursday, May 24, 2007, the Senate Budget Committee passed the bill, which is now headed for a full vote in the Senate. The bill was amended to reduce the leave time from 12 weeks (in the original bill) to 10 weeks. The Program's start date is also delayed, with the employee assessment beginning January 2009 and benefits starting July 2009. In addition, the assessment is now based on the TDI rate of $26,600; previously it was based on the social security rate of $97,000.
On the Assembly side, the bill has been referred to but not considered by the Assembly Labor Committee. In the weeks leading up to the summer legislative recess, there is a chance that the legislation may be considered in the Assembly.
Employers should be aware that Governor Corzine has been a vocal supporter of Paid Family Leave. While he has yet to publicly announce his support for this particular bill, it is anticipated that he will sign a Paid Family Leave bill if it reaches his desk.
While there is a lot of support for the bill, the legislation still has a long way to go before becoming a law. If you are interested in receiving more information about how this legislation could impact your business, please contact Richard J. VanWagner at 609.989.5042, or rvanwagner@sternslaw.com.
The New Jersey Civil Union Act and the Recent Amendments to the New Jersey Law Against Discrimination: How Will Employers be Affected?
New Jersey Governor Jon Corzine recently approved the Civil Union Act, effective February 19, 2007, making New Jersey the third State in the country to allow civil unions. Separate legislation was also approved, which amends the New Jersey Law Against Discrimination to prohibit discrimination or adverse employment action on the basis of an individuals gender identity or expression. This new Legislation will have a wide-ranging and immediate impact on employers in the State of New Jersey, who must ensure that their employment policies and procedures are in compliance with the new laws.
For more information, or if you have any other questions, please contact Karen A.Confoy at 609.989.5012, or kconfoy@sternslaw.com, or Erica S. Helms at 609.989.5062, or ehelms@sternslaw.com.
To read more, please click here.
Tax Assessment Appeals Due By April 1
By February 1, all municipal tax assessors in New Jersey are required to provide property owners with a notice of the current year's assessment, based on the value of the property, as of October 1 in the preceding year. Municipalities also periodically engage in reevaluations throughout the entire taxing district or will conduct re-assessments of individual properties. This can be problematic for taxpayers in light of the current downturn the real estate market is experiencing. As such, there is a potential that these new assessments are overstating the propertys true value. If that occurs, property owners may be able to claim that their assessments are excessive or discriminatory.
If you believe a current tax assessment is inflated or a municipality has undergone a recent reevaluation, it may be appropriate to consider taking an appeal. Appeals of this year's assessments must be filed on or before April 1, 2007 (or 45 days from the date the assessment was mailed, whichever is later).
For more information, or if you have any other questions, please contact David M. Roskos at 609.989.5018, or droskos@sternslaw.com. The firm will provide up to one hour of free consultation.
To read more, please click here.
Court Cautions Debt Collectors to Beware Misleading Language in Demand Letters
Consumer debt collection is an unfortunate fact of doing business. When consumer debtors don't pay, debt collectors write demand letters aimed at coercing payment. Collection letters frequently notify the debtor that the failure to pay could lead to referral to an attorney and the filing of a lawsuit. In a recent case, however, the Third Circuit Court of Appeals cautioned all those trying to collect a debt that seemingly innocuous language like that can lead to unexpected liability for the debt collector.
To read more, please click here.
Are All Construction Defects Now Subject To A Per Se 10-Year Homeowners' Warranty?
In DKM v Tp. of Montgomery, 182 N.J. 296 (2005), the New Jersey Supreme Court held that subject only to the 10-year statute of repose, the Uniform Construction Code Act, N.J.S.A. 52:27D-119 et seq. and the regulations promulgated thereunder, specifically N.J.A.C. 5:23-2.30(b), empower local code officials to cite developers for construction code violations in respect of new homes even after passage of title and notwithstanding that a certificate of occupancy had been issued. The Director of the Division of Codes and Standards of the Department of Community Affairs issued a letter to local code officials, dated February 9, 2005, to provide guidance in issuing citations in light of the DKM decision. That letter makes it clear that citations should be issued for code violations which, had they been known at the time, would have been grounds for withholding a certificate of occupancy regardless of whether the subject matter of the violation is covered by a homeowner's warranty, or the warranty period has elapsed, or a warranty claim previously was made and denied. Prior to the DKM decision, only "major structural defects" were subject to a 10-year warranty under the New Home Warranty and Builders Registration Act. See N.J.A.C. 5:25-3.2(a) 3. By virtue of DKM, it would appear that many code violations which are not major structural defects are now also subject to a per se 10-year warranty.
Please contact Vincent J. Paluzzi, Chair of the firm's Construction Law practice subgroup, with any questions regarding this article, at (609)989-5033, or at vpaluzzi@sternslaw.com.
New Jersey Election Enforcement Commission Proposes Rules and Delays Enforcement of New Lobbying Law
On January 3, 2005, the New Jersey Election Law Enforcement Commission (ELEC) proposed amendments and new rules implementing the lobbying law passed in June, 2004, by then-Governor McGreevey. One of the provisions signed into law, P.L. 2004, C.27, changes the definition of legislative agent to "government affairs agent" and substantially expands the registration and reporting requirements for such agents. Because many issues have arisen as to what constitutes lobbying or government affairs activity under the new law, ELEC held several public hearings in February and March, 2005, before adopting the rules as final---which may not occur until Fall 2005.
A major concern centers around the general definition of "governmental affairs agent," from an individual who attempts to influence legislation or regulation to any attempt to influence governmental processes. The term "governmental processes" is generally defined to include: rate setting; the development, negotiation, award and modification of public contracts; and all activities regarding the issuance, suspension, or revocation of permits or licenses. Although former Governor McGreevey stated that it was not his intent to require registration by attorneys representing clients in the "regular course of a routine litigation or administrative proceeding," this issue remains unclear.
Through public comment, ELEC expects to further define "routine activities" and what activities will require registration and therefore reporting. At this point, a basic interpretation of the new law suggests that attorneys in private practice, as well as in-house counsel for heavily regulated entities, may be required to register as government affairs agents because of their regular and continuing interaction with state regulators. However, this does not appear to be the Legislature's intent in passing the legislation, and testimony was presented before ELEC seeking clarification. Click here for a news story on the issue quoting Sterns & Weinroth's Richard J. Van Wagner.
Contractor Registration Deadline Extended to December 31, 2005
Amendments to the Contractor's Registration Act have deferred the deadline for home improvement contractors to register with the State from November 9, 2004 to December 31, 2005. State registrations issued to contractors who applied prior to the original deadline will be valid until December 31, 2006. Whether currently registered with the State or not, home improvement contractors must continue to pay local licensing fees until the Act becomes effective.
The effective date of the Act was deferred to afford the New Jersey Division of Consumer Affairs sufficient time to process the huge volume of applications anticipated. It also appears that certain of the consumer protection provisions of the Act will be re-examined, as it is generally understood that the requirement that contractors maintain $500,000 of commercial general liability insurancewill notprovide any coverage to consumers who seek to repair or replace deficient work.
For more information, go to http://www.state.nj.us/lps/ca/contractor.htm.
The Contractor's Registration Act
The Contractor's Registration Act (N.J.S.A. 56:8-136 et seq.) requires, for the first time in this State, all contractors engaged in selling or making home improvements to register annually with the New Jersey Division of Consumer Affairs. As of December 31, 2005, no municipality will issue a building permit to any home improvement contractor who is not so licensed. The Act preempts local ordinances requiring licensing or registration of such contractors, but does not affect a municipality's power to inspect work or to regulate the standards governing such work. For more information, see Sterns & Weinroth's Fall 2004 Construction Law Update.
New Taxes Imposed on Real Estate Purchasers
Assembly Bill No. A-3155 (P.L. 2004, c.66), popularly dubbed the "Mansion Tax," became effective August 1, 2004. This new legislation imposes, among other things, a new realty transfer fee to be paid by the purchaser on real estate purchases with a sales price in excess of $1,000,000 for non-exempt properties that are "zoned residential." Unlike the existing Realty Transfer Fee legislation, which permits sellers to negotiate the payment of such fees with purchasers, the new legislation imposes fees solely upon the purchaser.
In order to implement the new law, the New Jersey Division of Taxation has issued a new form Affidavit to be executed by purchasers and their legal representatives and submitted for filing with all deeds. The Affidavit requires a sworn statement by the purchaser, or a representative of the purchaser, as to whether the property is located in a "residential zone."
Unfortunately, the legislature did not define "residential zone." We have been advised that every property purchased for more than $1,000,000 and located in a zone where residences are permitted or conditional permitted uses ( e.g., if a planned residential development is a conditional use in a highway/commercial zone) may be subject to the new fees.
Assembly Bill No. A-3128 (P.L. 2004, c.55), also effective August 1, now requires that non-residents pay estimated income taxes on New Jersey real estate transactions prior to the recording of any deed. Thus, prior to closing, settlement agents now must determine the residency status of the seller, and confirm payment of estimated taxes before forwarding the deed to the County Clerk's office.
