New Jersey Court Clarifies Veteran Property Tax Exemption

In Pruent-Stevens v. Township of Toms River, the Tax Court of New Jersey addressed eligibility for the veteran’s property tax exemption pursuant to N.J.S.A. 54:4-3.30. It clarified that the term “widow” and “widower” defines a person and not the continued marital status of the person. Accordingly, surviving spouses of disabled veterans may be eligible for property tax exemption after they have remarried, so long as they are not currently married when requesting the exemption.

New Jersey Court Clarifies Veteran Property Tax Exemption

Facts of the Case

Plaintiff Rosanna Pruent-Stevens appealed the judgment of the Ocean County Board of Taxation that denied her application for a veteran’s property tax exemption. Plaintiff was the surviving spouse of a Vietnam War veteran who died from a 100 percent wartime service-connected disability.

The Plaintiff married Sgt. Peter J. Pruent in 1973. Ten years later, after the birth of his second daughter, Sgt. Pruent’s health slowly and progressively began to deteriorate. Sgt. Pruent died on August 31, 1989 at the age of 41. Beginning in 1990, Plaintiff filed her first of many applications to the U.S. Department of Veterans Affairs (VA) for Dependency and Indemnity Compensation (DIC) benefits. Concerned about health insurance and financial stability for herself and her daughters, Plaintiff married Charles J. Stevens in 1993. Twenty-three years her elder, and also a veteran, Mr. Stevens died in 1997 after only four years of marriage.

On February 12, 2014, almost 25 years after his death, the VA finally determined that Sgt. Pruent’s premature death was “presumptively connected” to his military service in Vietnam. The VA approved DIC benefits retroactive to Sgt. Pruent’s date of death. At the time of its decision, the VA was fully aware of Plaintiff’s marriage to Mr. Stevens in 1993, as evidenced by the decision’s reference to “Death certificate of claimant’s second husband, Charles Stevens, received January 16, 2014.” With full disclosure and knowledge, the VA termed Plaintiff “the un-remarried surviving spouse of Peter J. Pruent.”

Once the VA made its determination, Sgt. Pruent posthumously became a veteran who met the qualifications for property tax exemption in New Jersey. Plaintiff subsequently applied to defendant, Township of Toms River (Municipality), for a 100% disabled veteran’s exemption on her residence. On August 4, 2015, the Municipality’s Tax Assessor issued Plaintiff a Notice of Disallowance of Claim for Veteran’s Exemption/Deduction (the Notice). It stated that the application was denied based on N.J.S.A. 54:4-3.30(b)(1), which the assessor interpreted as terminating the exemption to surviving spouses who have at any time remarried. The Ocean County Board of Taxation upheld the disallowance.

Court’s Decision

The New Jersey Tax Court reversed. It concluded that the Plaintiff met the statutory requirements for a veteran’s property tax exemption on her residence for tax year 2016.

The court held that an applicant’s marital status does not become relevant until such time as the United States Department of Veterans Affairs determines that the deceased spouse was 100% disabled due to military service. As explained in the court’s opinion:

It is both illogical and unfair to start the clock before the race has begun. The Constitution and the Legislature specifically referenced and included the VA’s determination of 100% disability as an eligibility requirement for a tax exemption. It was not until February 12, 2014, that the VA determined that Sgt. Pruent was 100% disabled due to his military service. Accordingly, the Plaintiff’s eligibility to apply for the veteran’s property tax exemption as a surviving spouse did not commence until 2014. At the time she completed her application, she was the unmarried surviving spouse of Sgt. Pruent, and she qualified for the exemption.

The court further held that the Legislature’s use of the qualifying phrase “has not remarried” is meant to reflect current marital status during “widowhood” or “widowerhood.” In so ruling, it rejected the Municipality’s argument that the Plaintiff’s marriage to Mr. Stevens permanently severed her status as Sgt. Pruent’s widow.

In support of its decision, the Tax Court also cited other state statutes entitling widows to benefits. “Had the Legislature wished to permanently extinguish a surviving spouse’s right to benefits upon remarriage it could have employed language expressly effecting such a result, as it did in N.J.S.A. 18A:66-2 and N.J.S.A. 43:6A-3t,” the court wrote. “Thus the refusal to employ such language in N.J.S.A. 54:4-3.30(b)(2) convinces the court that the Legislature did not intend such restrictions under the Exemption Statute.”

The Tax Court also noted that the Legislature can resolve the ambiguity as it sees fit. “If the policy of the New Jersey Legislature is as the Municipality argues, that the surviving spouse’s remarriage forever terminates the right to the veterans exemption, it can amend the statute to explicitly state it,” the court stated. “Alternatively, if the Legislature’s policy is to provide the exemption during the periods when the surviving spouse is not married, it can erase any ambiguity by adopting such language.”

For more information about the court’s decision in Pruent-Stevens v. Township of Toms River or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

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