NH Supreme Court Clarifies Standard for Complying with Tax Abatement Application Signature Requirements
Property owners and triple net tenants may challenge their New Hampshire real estate taxes when the assessed value of their property is disproportionately higher than the assessed values of other properties in the municipality. The applicable statute, RSA 76:16, requires taxpayers to certify a good faith basis for the request exists, and the facts stated are true, by signing the application. See N.H. Admin. R., Tax 203.02(b)(4); RSA 76:16. If the taxpayer does not sign the application, the municipality may deny the abatement request.
In some circumstances, such as being outside of the state or country, the taxpayer may not have the ability to sign the tax abatement application and still meet the strict deadline for its filing. This was the case in the NH Supreme Court’s recent decision in Appeal of Keith R. Mader 2000 Revocable Trust issued on June 5, 2020.
In the Mader case, the property owners primarily lived out of state and contacted a local attorney three weeks before the deadline to file the tax abatement application on their behalf. The attorney was leaving for vacation when discussing the scope of representation with the property owners, and when he returned from vacation, only had three days to complete and file the tax abatement applications. Given the circumstances, the attorney signed the applications on the clients’ behalf.
The municipality denied the tax abatement applications for reasons other than the lack of compliance with the signature requirement; however, when the attorney filed appeals with the Board of Tax & Land Appeals (“BTLA”), the BTLA dismissed the appeals for failure to comply with the signature and certification requirement.
While the BTLA can excuse noncompliance with the signature requirement “due to reasonable cause and not willful neglect”, the BTLA concluded the appellants’ actions did not meet this standard because the attorney made a conscious decision not to obtain the taxpayers’ signatures in preparing the abatement applications after returning from vacation. Essentially, the BTLA felt the application omissions were intentional, and therefore not excusable under the standard. The NH Supreme Court reversed the dismissal of the appeals, and remanded the case back to the BTLA for further consideration in light of its opinion in the case.
In interpreting the “reasonable cause and not willful neglect” standard, the court held a taxpayer can file an appeal to the BTLA despite lack of taxpayer’s signature and certification on the application if the taxpayer can show that, despite exercising ordinary business care and prudence: 1) it was not reasonably possible to submit the application with the taxpayer’s signature and certification, and 2) the taxpayer can further show that he or she was not recklessly indifferent to the signature and certification requirement in preparing the application.
The court also repeated its early declaration that the tax abatement scheme should be construed liberally with the goal of making abatement proceedings free from technical and formal obstructions.
While this ruling generally favors taxpayers, taxpayers can avoid wrangling over technical defects like signatures by getting an early start on the process. The deadline to file abatement applications in New Hampshire is March 1.