Property Taxes Grace Period Extension – June 1, 2020
NEW JERSEY – On April 28, 2020, Governor Phil Murphy issued Executive Order 130 authorizing local units to extend the second property tax payment installment grace period through June 1, 2020.
For some taxpayers, the ongoing COVID-19 related economic disruption is making it difficult to meet the May 1, 2020 due date for timely payment of real property taxes. Under N.J.S.A. 54:4-67(a), local governments may fix the rate of interest to be charged for the nonpayment of taxes, assessments, or other municipal liens or charges, on or before the date when they would become delinquent, and may provide that no interest shall be charged if payment of any installment is made within the tenth calendar day following the date upon which the same became delinquent, thereby establishing a grace period running through May 11, 2020 for second-quarter property taxes in the case of municipalities on a calendar year budget cycle, or, in the case of municipalities on a State Fiscal Year budget cycle, a grace period running through May 11, 2020 for fourth-quarter property taxes.
Executive Order 130 grants municipalities the authority to extend the ten-day grace period for property tax payments due May 1st through June 1st. This will allow property owners in towns that opt to take advantage of the Order to pay their May 1st property tax installments by no later than June 1st without incurring penalty or interest. Extension of the grace period must be effectuated prior to the expiration of the existing grace period, meaning on or before May 11, 2020. Public notice must be provided, but individual taxpayer notice is not required.
Please be aware that no extension of the deadline for levy payments to the county or school districts has been authorized, and any State Fiscal Year municipality would be unable to hold an accelerated tax sale for the fourth quarter due to the extended grace period expiring after the date upon which initial notice of the accelerated tax sale must be provided, so cash position should be a relevant factor in any local unit?s decision whether to authorize a grace period extension for this quarter.
Any municipality that ultimately determines to authorize a grace period extension under Executive Order 130 shall notify the Director of the Division of Local Government Services in the Department of Community Affairs by providing a copy of the establishing resolution not later than the third business day next following the municipal governing body’s adoption of the resolution.
Prior to the enactment of Executive Order 130, some municipalities have unilaterally undertaken a variety of actions absent statutory authorization to do so, including extending the statutory property tax payment installment date and grace period, as well as attempting to establish an effective grace period extension through temporary alteration of the interest rate. However well-intentioned, these extraordinary measures by municipalities create inconsistency throughout the State, which may generate individual confusion regarding property tax payment obligations and may also create or exacerbate local fiscal challenges, including but not limited to, threatening the ability to fulfill obligations. Therefore, in accordance with Executive Order 130, no municipality, county, or any agency or political subdivision of this State shall enact or enforce any order, rule, regulation, ordinance, or resolution which will or might in any way conflict with any of the provisions of Executive Order 130.
