News & Thought Leadership from Sulloway & Hollis

February 3, 2021

Property Tax Abatement Deadline Looms

With the start of the new year, property owners and municipal officials alike need to keep one eye on the calendar as the deadline looms for filing applications for property tax abatements.

Under New Hampshire’s unified tax abatement scheme, an abatement application may be filed with municipal officials after the final tax bill is issued for a given tax year. “Any person aggrieved” by the assessment of such taxes may file for an abatement with the selectmen or assessors, with the abatement application due no later than March 1. As such, for taxpayers looking to challenge their tax year 2020 assessments, the clock is ticking.

Taxpayers looking for an abatement should keep in mind the importance of preparing a well-developed local abatement application. To be successful, a taxpayer has the burden of proving that it paid more than its proportional share of taxes for the tax year in question. To carry this burden, the taxpayer must establish disproportionality – or that the taxpayer’s property was assessed at a higher percentage of fair market value than the percentage at which property is generally assessed within the municipality.

While a full appraisal may not be necessary to seek an abatement at the local level, an abatement application should still reference available market evidence and include strong supporting documentation to increase the taxpayer’s likelihood of success. For commercial properties in particular this year, it will be important for taxpayers to establish how the altered business environment of 2020 may have impacted business operations. An abatement application must be timely filed with the municipality or it will not be considered, and the taxpayer will lose the opportunity to further challenge the assessment before the Board of Tax and Land Appeals or the Superior Court.

On the municipal side, it would not be surprising for selectmen and assessors to see more abatement applications than usual for the 2020 tax year given the disruptions to business operations and day-to-day life that so many experienced.

Regardless of how many abatement applications are filed this year or the nature and extent of them, municipal officials have the same statutory and equitable obligation to ensure a fair, transparent and accountable assessment process. The Supreme Court has recognized on multiple occasions that the tax abatement system is intended to advance the principles of remedial justice and should be implemented in a way that is free from technical and formal obstructions. Similarly, the New Hampshire Assessing Standards Board imposes various obligations on municipal officials, including requiring that errors be corrected and that supplemental analysis be undertaken, when necessary, to ensure that assessments are proportional and are based on appropriate market data.

Accordingly, as they consider abatement applications this year, municipal officials should bear in mind their independent legal and ethical obligations to ensure that assessments reflect market value and are proportional. Those obligations extend to making prompt corrections when a municipality discovers that property has been over assessed based on subsequent information, subject to tests of materiality and reasonableness, to ensure a fair, transparent and accountable assessment system.

New Hampshire’s tax abatement process is meant to “provide selectmen a liberal tax abatement framework to promote equitable resolutions.” With the March 1 deadline looming, those taxpayers interested in filing an abatement application should carefully consider their options, including what information will be necessary for a strong submission at the local level. Likewise, municipal officials should keep in mind their equitable and statutory duties when reviewing abatement applications to ensure that applicants are given fair consideration based on all relevant factors.