Susan A. Feeney is a partner in McCarter & English LLP’s Newark, N.J., office. Her practice focuses on state taxation and local property taxation for all types of industries and includes redevelopment law and condemnation.
Feeney is a member of the New Jersey Supreme Court Committee on the Tax Court and the State and Local Tax Committee of the ABA Tax Section. She was appointed to the Sales and Use Tax Review Commission of the State of New Jersey and is a member of the N.J. Division of Taxation Tax Director’s Advisory Council. She is the attorney for the N.J. Association of County Tax Board Commissioners and Administrators, and is past president and treasurer of Legal Services Foundation of Essex County. She is also the immediate past president of the New Jersey State Bar Association (2011-2012) and has been appointed by the Essex County Bar Association as its delegate to the American Bar Association House of Delegates.
Q: What is the most interesting or challenging tax problem you worked on to date?
A: I like working in the sales and use tax area because I learn about different industries. Recently, I litigated a case in the New Jersey Tax Court involving the interpretation of the New Jersey sales and use tax exemption for marine terminal facilities. The case involved whether the taxpayer’s storage and repairs to containers used to transport cargo and repairs to chassis which transport the containers and cargo to and from the marine terminals were subject to tax. One issue was whether the taxpayer’s property was a marine terminal facility even though it was located a few miles from water’s edge. Touring a marine terminal facility at Port Newark was extremely interesting. Learning about the industry helped flesh out the arguments we could make in the case. We also had two experts in the shipping industry who helped us develop the case and they both eventually submitted reports which were admitted into evidence.
We decided the best way to present the case was to take a video of the facility at the port and our client’s facility a few miles away to show at the hearing in the tax court. The video helped educate us and eventually the court about the industry and the services provided. In a very simple way, it was evident in the video that there were no real differences between performing these services at the port or a few miles from the port. We recently received a decision and prevailed on all issues. The case was important to the client due to the hundreds of thousands of sales tax dollars in dispute. But it was also important to the entire industry because other taxpayers had been audited and assessed similar sales tax. The industry’s trade association paid the legal fees and was also involved in offering important analysis of the industry along the way. The case was a good example of how the taxpayer, trade association and legal counsel worked together to present a case to achieve the right result.
Q: Currently, what is a pressing tax concern for your clients and how are you addressing it?
A: On Sept. 18, 2013, the Economic Opportunity Act of 2013, P.L. 2013, c. 161 (A3680/S2583) was signed into law. This new law consolidates five financial incentive programs previously available in New Jersey into two economic development tools. There is a new “Grow NJ” program which centralizes New Jersey’s business attraction and retention incentives in the form of tax credits for employers that create or retain jobs. There is also a new Economic Redevelopment Grant Program (“ERG”). ERG provides financing incentives of up to 20 percent of qualified redevelopment project costs and up to 30 percent in certain designated growth zones.
This overhaul makes the programs easier to use and allows the state to target certain geographic areas and business sectors for economic stimulation through corporate tax credits. Small business may obtain incentives too. This new act will hopefully make New Jersey more competitive with other states in attracting businesses and jobs to the state. Obviously, since this changes the way New Jersey will operate, companies are eager to know how these two programs will work and how to take advantage of them.
Camden, Passaic, Paterson and Trenton are designated Garden State Growth Zones and, as such, qualified projects may receive at least $5,000 in tax credits per job created under Grow NJ and tax credits totaling 30 percent under the ERG program. Projects in these cities may also get a 10-year abatement from tax on improvements to property, with another 10 years of reduced tax payments. The challenge is to inform and educate developers about this program and expand their horizons to include these geographic areas. We are finding that developers are taking a look at these cities and expect to see increased interest in the coming year in qualifying for these incentives.
Q: What do you anticipate being the biggest regulatory challenge in your practice in the coming year and why?
A: In the property tax area, one challenge is the new Monmouth County Assessment Demonstration Program, which goes into effect for the 2014 tax year. The program restructures the assessment calendar to position the appeal process at the county board level before the budgetary process for each municipality.
The two most important changes as a result of the program are that the assessment notices were mailed on or about Nov. 15, 2013, for the 2014 tax year — postcards were previously sent in February of the tax year — and the new filing deadline for the appeal of property assessments to the Monmouth County Board of Taxation will be Jan. 15, 2014 (the previous deadline was April 1).
The appeal deadline for direct appeals to the tax court, for assessments over $1,000,000, remains at April 1. From a practice point of view, we will be filing tax appeals to the Monmouth board earlier and will need to follow up with clients to receive notices and evaluate properties earlier than usual. We will also be receiving county tax board judgments which will need to be appealed to the tax court at an earlier date. We will also still have the “normal” April 1 filing date in the remaining counties. All of this will make for a longer filing season this year. It will be interesting to see the effect on the municipal budgets in Monmouth County municipalities as this change takes place.
Q: Outside of your own firm, who is an attorney in your practice area whom you admire and what is the story of how she or he impressed you?
A: Bill Northgrave of McManimon, Scotland & Baumann LLC, is an attorney I respect and enjoy working with. Over the years, Bill and I have been “adversaries” in negotiating and documenting payments in lieu of tax under the Long Term Tax Exemption Law and the Redevelopment Area Bond Law. We eventually draft the financial agreement which controls the tax abatement. I generally represent the developer and Bill represents the municipality. What I like about Bill is that he is smart, hardworking and removes the need to be adversarial. Instead, the two of us work together to get the project built with a tax payment and structure that is mutually advantageous to the developer and the municipality. Bill is a strong advocate for his client but at the end of the day, he knows it is in both our clients’ interests to get the project built and that becomes our common goal.