WELLS REIT II - 80 PARK PLAZA, LLC v. DIRECTOR,
DIVISION OF TAXATION // CHICAGO FIVE PORTFOLIO, LLC v.
DIRECTOR, DIVISION OF TAXATION
A-5276-07T3; A-3381-08T3 07-28-10
In this opinion, we address conflicting Tax Court decisions
regarding a 2006 legislative amendment (L. 2006, c. 33) to New
Jersey's realty transfer fee on property purchases over
$1,000,000, also known as the "Mansion Tax," N.J.S.A. 46:15-7.2.
This amendment, codified as N.J.S.A. 46:15-7.4, provides a
refund of the Mansion Tax to contracts for commercial properties
that were "fully executed before July 1, 2006," provided that
the deed was transferred on or before November 15, 2006. Two
published Tax Court opinions, Wells Reit II-80 Park Plaza, LLC
v. Director, Div. of Taxation, 24 N.J. Tax 98 (2008), and
Chicago Five Portfolio, LLC v. Div. of Taxation, 24 N.J. Tax 342
(2008), came to different interpretations of the phrase "fully
executed before July 1, 2006."
We hold that: (1) N.J.S.A. 46:15-7.4 is not an "exemption"
from the Mansion Tax, but rather a refund provision; (2) as
such, the section should be construed in favor of the taxpayer;
and (3) the plain meaning and common usage of the phrase "fully
executed before July 1, 2006," means a real estate contract that
is signed and binding upon the parties before July 1, 2006,
whether or not there are subsequent amendments to the terms.
Thus, we affirm Chicago Five Portfolio, LLC v. Div. of Taxation
and reverse Wells Reit II-80 Park Plaza, LLC v. Director of
Taxation.
