No Property Tax Exemption for Disabled Veteran Whose Injuries Did Not Occur “In a Theater of Operation”

Fisher v. City of Millville, 450 N.J. Super. 610 (App. Div. 2017).  Article VIII, section 1, paragraph 3 of the New Jersey Constitution allows the Legislature to enact legislation that grants tax exemptions to veterans.  The Legislature has done that, providing (as one available option) a property tax exemption to honorably discharged veterans who have been declared disabled as a result of injury in “active service in time of war.”  Plaintiff in this case sought that exemption.  She had been injured in 2002 in a training exercise at Fort Wood in Missouri.  Later, she was transferred to Fort Stewart, Georgia, as part of a unit that was to deploy to Afghanistan as part of Operation Enduring Freedom.  Due to her injuries, however, plaintiff did not deploy.  Instead, she remained behind, performing support duties.  She eventually got an honorable discharge and was declared 100% disabled.

The defendant City denied plaintiff’s request for a tax exemption.  The Tax Court affirmed, ruling on cross-motions for summary judgment on which the parties submitted a joint statement of material facts.  Today, in an opinion by Judge Lihotz (an alumna of the Tax Court), the Appellate Division affirmed.

Since the facts were all stipulated, the only issue was one of statutory interpretation, regarding whether plaintiff’s injuries were sustained in “active service in time of war.”  Thus, as Judge Lihotz observed, the de novo standard of review applied.  Plaintiff had a special hurdle to overcome, since “taxation is the rule, and the plaintiff bears the burden of proving an exemption.”

N.J.S.A. 54:4-8.10 defines lists various wars and conflicts that qualify as “time of war.”  Operation Enduring Freedom was one of those.  But the statute further required service “in a theater of operation and in direct support of that operation,” and that the injury have been sustained “while engaged in such service.”  Judge Lihotz ruled that “[t]he statute, by its clear terms, requires service in the specified geographic area,” and that the geographic area limitation was “purposeful” on the part of the Legislature.

Plaintiff also argued that because her unit was stationed in a combat zone, and her service was in direct support of that unit, “she was exposed to the experiences of war and, being disabled as a consequence of such service, as a matter of policy,” should receive the tax exemption.  Judge Lihotz disagreed.  Noting that tax exemptions are strictly construed because of the policy that all property should bear its fair share of taxation, Judge Lihotz held that the Legislature intended to make the exemption turn “on the exposure of the service member to the harms of war, an experience not visited upon plaintiff.”