JMJ Properties v. Town of Auburn

Town Authorized to Issue Supplemental Tax Bill Where Land Use Changed
New Hampshire Supreme Court, No. 2014-579
Tuesday, August 11, 2015

The New Hampshire Supreme Court held that the Town of Auburn was authorized to issue a supplemental tax bill for property that had lost its current use status during the tax year.

JMJ’s Auburn subdivision lost its current use status in July 2011 due to the commencement of road construction, but the town did not learn of the change until summer 2012, and therefore issued tax bills reflecting the current use assessment for 2011 and 2012. To rectify the erroneous current use assessment, the town issued a land use change tax (LUCT) bill in December 2012. It then abated the 2012 tax bill for the entire parcel, and issued supplemental tax bills for each individual lot of the subdivision, reflecting the market value of each lot for the entire tax year beginning on April 1, 2012.

JMJ argued that the town could not issue supplemental tax bills under RSA 76:14 because JMJ’s property had not “escaped taxation.” JMJ took the position that the town had to wait until tax year 2013 to issue these bills. The trial court determined that neither RSA 76:14 nor Pheasant Lane Realty Trust v. City of Nashua, 143 N.H. 140 (1998) applied, and, therefore, under RSA 79-A:7, the town was authorized to issue the supplemental tax bills.

On appeal, the New Hampshire Supreme Court held that the superior court did not err when it determined that RSA 79-A:7 authorized the town to issue supplemental tax bills in December 2012 based upon the market value assessments of the lots. The relevant portion of the current use statute states that a property is entitled to current use status only “until a change in land use occurs.” Moreover, once the change in use occurs, the statute mandates that the land  “[t]hereafter,  . . .  shall be taxed at its full RSA 75:1 value.” The Court concluded that if the legislature meant to require a municipality to wait until the next year, it could have explicitly stated such a “time line” in the statute. Instead, the legislature simply used the word “thereafter” without reference to a required interval between the change in use and the taxation of the property based on market value. Therefore, the Court concluded that “a market value assessment is authorized at the time of the change in use, regardless of when the municipality learns the change is use occurred, or when it issues a LUCT bill.”

Learn More in Court's Decision.