 | Smoking | EVIL | choice! |
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pg. 8 On June 21, 2002, Appellant made an oral motion to disqualify the Hon. Harold A. Kuskin, J.T.C., as trial judge. The Tax Court denied Appellant's motion for the reasons set forth in the court's oral decision placed on the record on June 21, 2002. (1T14-1T29). The Tax Court memorialized its decision denying Appellant's motion by Order dated July 3, 2002. (E1-E2). Appellant then moved before this Court for leave to appeal in order to challenge the Tax Court denial of his motion to recuse Judge Kuskin. (F1-F3). Appellant's motion for leave to appeal, which was opposed by the Director, was denied by this Court and memorialized in an order of September 3, 2002. (Gl). Thereafter, the Director moved for summary judgment pursuant to R. 4:46. After briefs were submitted by both parties, rhe motion was heard on November 22, 2002. For the reasons set forth in the court's oral decision of that date, the Tax Court granted the Director's motion for summary judgment. (2T12-2T35). Initially, the Tax Court found that since there was no dispute as to the fact that Appellant purchased 52 cartons of cigarettes from Smoke's Advantage for his own use or the use of his friends, and that Appellant had not paid Cigarette or Sales and Use Taxes associated with these purchases, the Director had properly Additionally, the Tax Court thoroughly considered Appellant's arguments regarding the Director's use of Appellant's cigarette purchase information in assessing the taxes, supplied to the Director by Smoke's Advantage pursuant to the requirements of the Jenkins Act. In finding that although Smoke's Advantage's advertising may have been misleading regarding Appellant's liability for state taxes, the court nevertheless held that Appellant did not have a right to privacy in the cigarettes purchase information which constituted a basis to avoid taxes admittedly not paid by Appellant. (2T31-2T32). Finally, the Tax Court noted that Appellant's arguments regarding privacy were not grounded in a fundamental right protected by either the state or federal constitutions and, even if a fundamental right was implicated, the Tax Court concluded that the state has a compelling At the Tax Court's request, a certification was submitted :n or about November 26, 2002 on behalf of the Director, supporting :he imposition of a 5% tax amnesty penalty pursuant to N.J.S.A. :4:53-18b, which amounted to $25.67. (2T33). Submitted with the :ertification was an April 30, 2002 letter from the undersigned counsel to Appellant on behalf of the Director, advising Appellant that the tax liability imposed by the Director was eligible for tax amnesty. (Da28-Da31). Subsequently, an order was entered on December 6, 2002 granting the Director's summary judgment motion and entering ;udgment in favor of the Director in the amount of $513.44, and ;25.67 as 5% tax amnesty penalty, plus interest. (K1-K2). Appellant filed a Notice of Appeal January 7, 2003. It is undisputed that between August of 1999 and March of !IOO Appellant purchased fifty-two cartons of cigarettes from :.~.oke's Advantage of Louisville, Kentucky, an unlicensed :istributor of cigarettes in New Jersey conducting cigarette sales :r. rough the Internet and by phone. Consequently, as Smoke's -dvantage failed to remit the taxes arising from those iransactions, the Director properly determined that Appellant was .iable for the unpaid Cigarette Tax under N.J.S.A. 54:40A-1, et ;eq. . and Sales and Use Tax under N. J.S.A. 54:32B-1, et seq. , resulting from these purchases. Thus, as the material facts of :his matter are undisputed and do not raise any genuine issues .'hich would preclude it, the Tax Court correctly determined that :he Director is entitled to judgment as a matter of law. This :ourt should affirm the decision of the Tax Court. Summary judgment shall be granted where "there is no renuine issue as to any material fact ... and ... the moving party _s entitled to judgment as a matter of law." R. 4:46-2(c); See 'udson v. Peoples Bank and Trust, 17 N. J. 67, 74 (1954) . The In a sound and thorough oral decision^ Judge Kuskin determined that summary judgment for the Director was warranted. As a threshold matter, this Court's review of the Tax Court's decision is properly guided by the well-established presumption of validity that attaches to the Director's assessments. See H.J. Bradley & Fire Alarm Co. v. Taxation Div. Dir., 4 N.J. Tax 213, 229 Tax 1982). "Courts have recognized the Director's expertise in the highly specialized and technical area of taxation." Aetna Burglar & Fire Alarm Co. v. Director, Div. Of Taxation, 16 N.J. Tax 584, 589 (Tax 1997) (citing Metromedia. Inc. v. Director, Div. Of Taxation. 97 N.J. 313, 327 (1984)). The Director's construction of a tax statute, "which is not plainly unreasonable and with which the Legislature has not interfered, is entitled to prevail." Ibid. Judge Kuskin accorded proper deference to the Director's reasonable interpretation of the Cigarette Tax Act and Sales and Use Tax Act. Under the Cigarette Tax Act, N.J.S.A. 54:40A-1 et sea., a tax is imposed on the sale, use or possession for sale or use within this State of all cigarettes at the rate of $0.04 for each cigarette. FN. J.S.A. 54 : 40A-8 .****] See Supermarkets General Corp. v. Taxation Div. Director, 4 N.J. Tax 431, aff'd. 6 N.J. Tax 252 (App. Div. 1982) (holding "use or possession for sale or use" included cigarettes stored in the State by the distributor but never sold). The Cigarette Tax Act, read in pari materia with the Unfair Cigarette Sales Act, N.J.S.A. 56:7-18, et sea., "is designed to impose and prescribe a method of collection of a tax on the sale of cigarettes; to provide for the licensing of distributors, dealers and consumers; to provide for the control of the transportation of cigarettes in and through the State; and to provide penalties for violations of the Act." C.I.C. Corp. v. Township of East Brunswick, 266 N.J. Super. 1, 9 (App. Div. 1993), aff'd, 135 N.J. 121 (1994)(citing Coast Cigarette Sales, Inc. v. Mayor of Council. 121 N.J. Super. 439, 447 (Law Div. 1972)). "** L_^ 2002, c_._ 33, § 1, eff. July 1, 2002 increased the rate of Cigarette Tax imposed under the Cigarette Tax Act from $0.04 per cigarette to $0.075 per cigarette. However, Appellant was assessed Cigarette Tax at the rate of $0.04 per cigarette, consistent with the rate imposed at the time of Appellant's cigarette purchases which are the subject of this appeal. Additionally, the Sales and Use Tax Act, N.J.S.A. 54:32B-., et seq. , has been amended so that cigarettes subject to tax .r.der the Cigarette Tax Act are no longer exempt from the tax .-posed under the Sales and Use Tax Act. See N.J.S.A. 54:328-8.24, :epealed by L. 1990, c. 40, § 11. The Sales and Use Tax Act :rovides, in pertinent part:
For purposes of clause (A) of this section, the tax shall be at the applicable rate, as set forth hereinabove, of the consideration given or contracted to be given for such property.... FN.J.S.A. 54:32B-6.] Both the Cigarette Tax Act and the Sales and Use Tax Act provide vital sources of state revenue. Indeed, so important is a state's collection of cigarette taxes as a source of state revenue, :ongress enacted the Jenkins Act, 15 U. S.C. § 375, et seq. , to assist states in the collection of sales and use taxes on :igarettes and to address the widespread problem of evasion. See Jeeld v. Giroux, 24 N.J. 224, 228 (1957)(citing Senate Report found it 1949 U.S. Code Cong. Service, p. 2159). The Jenkins Act, supra, provides in relevant part:
(2) not later than the 10th day of each calendar month, file with the tobacco tax administrator of the State into which such shipment is made, a memorandum or a copy of the invoice covering each and every shipment of cigarettes made during the previous calendar month into such State; the memorandum or invoice in each case to include the name and address of the person to whom the shipment was made, the brand, and the quantity thereof.
(b)
The fact that any person ships or delivers for shipment any cigarettes shall, if such shipment is into a State in which such person had filed a statement with the tobacco tax administrator under subsection (a)(1) of this section, be presumptive evidence (1) that such cigarettes were sold, or transferred for profit, by such person, and (2) that such sale or transfer was to other than a distributor licensed by or located in such State. [15 U.S.C. § 376.]
POINT II The Director's initial assessment of Cigarette Tax, approximately six months after Appellant began purchasing cigarettes from Smoke's Advantage, was not improper. Indeed, under the Cigarette Tax Act, Appellant was actually required to obtain a license before acquiring unstamped cigarettes for his use. N.J.S.A. 54:40A-3 provides, in pertinent part, that no person shall "acquire unstamped cigarettes for consumption, storage or use in this State without having first obtained the appropriate license for the purpose as prescribed by this act." Such a license can be obtained from the Director by a consumer for the fee of $1.00. See N.J.S.A. 54:40A-4h. Additionally, the Cigarette Tax Act requires every licensed consumer who has acquired cigarettes for use to complete and file, "on or before the twentieth day of the month following receipt of such cigarettes,... a report showing the amount of cigarettes so received. Said report shall be accompanied by a remittance for the full amount of the tax due." N. J. S.A. 54:40A-7. As the Cigarette Tax Act provides no duty on the Director to assess Cigarette Tax within a prescribed period of time, and actually places an affirmative duty on the consumer to obtain a license for and remit any taxes due for the purchases of unstamped cigarettes, there is no basis to support Appellant's position that the Division of Taxation acted inappropriately in failing to advise Appellant of his liability for cigarette tax until six months after his initial purchase of cigarettes from Smoke's Advantage. The fact that Appellant may have been ignorant of the requirement under N.J.S.A. 54:40A-7 that he obtain a license, and remit a report and payment for taxes before the twentieth day of the month following the receipt of the unstamped cigarettes, does not operate to justify his failure to comply with the Cigarette Tax Act, nor does it place a burden on the Director to assess Cigarette Tax within a certain period of time for the convenience of the taxpayer, where no such time limitation for assessing the tax is set forth by the Legislature in the Cigarette Tax Act itself. See Schirmer-National Co. v. Director, Div. of Taxation, 17 N.J. Tax 495, 504 (Tax Ct. 1998), aff d 19 N.J. Tax 47 (App., Div. 2000) (noting the well-settled principle that "every person is conclusively presumed to know the law, statutory and otherwise") (citations omitted). Additionally, the Sales and Use Tax Act, N.J.S.A. 54:32B-1, et sea., does not require that the Director assess Sales and Use Tax within a certain period of time where the taxpayer has failed to file a Sales and Use Tax return. Under N.J.S.A. 54:32B-27(b), the Director is required to assess any additional Sales and Use Tax within 4 years of the date a Sales and Use Tax return was filed. However, certain exceptions to this rule existed, and still exist, which permit the Director to assess Sales and Use Tax "at any time." Ibid. Significantly, where "no return has been filed," the Legislature has determined that no time limitation should be placed on the Director's ability to assess Sales and Use Tax against the non-filing taxpayer. The Legislature's decision not to include a statute of limitations in N.J.S.A. 54:32B-27(b) where no Sales and Use Tax return has been filed reflects the good and compelling policy reasons that surely must have informed the Legislature's decision in this regard. The substantial revenues derived from Sales and Use Tax collections are used to fund essential State and local budgets. See, e.g. F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418 (1985); Bonnano v. Director, Div. of Taxation. 12 N.J. Tax 552 (Tax 1992). Clearly, the Legislature was concerned with providing maximum protection to public fiscal budgets by deciding not to impose a time limit on the Director's Sales and Use Tax assessments where no tax return has been filed. In addition, it is entirely reasonable for the Legislature to decide that individuals who fail to file tax returns, and thereby attempt to avoid their tax obligations, should not benefit from a limitations period. Here, there is no claim by Appellant that he filed a Sales and Use Tax return. In the absence of filing such a return, the Director was not bound by any statute of limitations with respect to assessing Sales and Use Tax resulting from Appellant's cigarette purchases. Moreover, even if Appellant had filed a Sales and Use Tax return after purchasing the unstamped cigarettes, under N.J.S.A. 54:32B-27(b), the Director would have had 4 years to assess any additional Sales and Use Tax from the date a Sales and Use Tax return was filed. Consequently, the fact that the Director began assessing Appellant Sales and Use Tax six months after he initially began purchasing the cigarettes from Smoke's Advantage is not, despite Appellant's arguments to the contrary, in opposition to the statute of limitations imposed upon the Director for assessing Sales and Use Tax, nor is it contrary to any notions of fairness, as Appellant also contends.
his onerous burden of demonstrating that the imposition of taxes thereunder is unconstitutional. A. APPLICATION OF THE CIGARETTE TAX ACT, THE SALES AND USE TAX, AND THE JENKINS ACT TO APPELLANT, WHO PURCHASED CIGARETTES FROM AN UNLICENSED DISTRIBUTOR, DOES NOT CONSTITUTE EXCESSIVE TAXATION IN VIOLATION OF THE EQUAL PROTECTION CLAUSE. With respect to Appellant's claims of excessive, discriminatory taxation in violation of the Fourteenth Amendment's Equal Protection Clause and Article 1, Paragraph 1 of the New Jersey Constitution, the Tax Court recognized that Appellant has not met his burden of overcoming the presumed constitutional validity of the taxing statutes at issue here. Additionally, the Tax Court properly rejected Appellant's arguments with respect to the constitutionality of the Jenkins Act, as this Act has been held to be constitutional in a number of contexts. Prior to addressing Appellant's arguments, it should be noted that the presumption of constitutionality attending legislative actions is strongest in the area of taxation. Hollar v. Govt. of Virgin Islands. 857 F.2d 163, 170 (3d Cir. 1988). The United States Supreme Court provides further guidance on this fundamental constitutional principle: The broad discretion as to classification possessed by a legislature in the field of taxation has long been recognized....[T]he passage of time has only served to underscore the wisdom of that recognition of the large areas of discretion which is needed by a legislature in formulating sound tax policies. Madden v. Kentucky. 309 U.S. 83, 87-88, 60 S.Ct. 406, 408, 84 L.Ed. 590 (1940). The Court further opined that See also Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356, 359, 93 S.Ct. 1001, 1003-04, 35 L.Ed.2d 351, 354-55 (1973)(holding that "[w]here taxation is concerned and no specific federal right, apart from equal protection, is imperiled, the States have large leeway in making classifications and drawing lines which in their judgment produce reasonable systems of taxation"); New Jersey State Bar Ass'n v. Berman. 259 N.J. Super. 137, 146-47 (App. Div. 1992); Domenick v. Director, Div. of Taxation, 176 N.J. Super. 121, 129-30 (App. Div. 1980). Statutes are presumed to be constitutional, Harvey v. Essex Ctv. Bd. of Freeholders. 30 N.J. 381, 388 (1959), and the judicial branch should accept the construction which renders the statute constitutional, if it is reasonably susceptible of such construction. State v. Profaci, 56 N.J. 346, 350 (1970). Indeed "[ojnly a statute ^clearly repugnant to the Constitution' will be declared void." Ramos v. Passaic City, 19 N.J. Tax 97, 101 (Tax Ct. 2000) (quoting Town of Secaucus v. Hudson County Bd. of Taxation, 133 N^J. 482, 492-93 (1993), cert, denied, 510 UJ3. 1110, 114 S. Ct. 1050, 127 L. Ed. 2d 372 (1994)). Indeed, while States are subject to the requirements of the Fourteenth Amendment, the Equal Protection Clause "imposes no iron rule of equality, prohibiting the flexibility and variety that are appropriate to reasonable schemes of state taxation [and] [t]he State may impose different specific taxes upon different trades and professions and may vary the rate of excise upon various products. It is not required to resort to close distinctions or to maintain a precise, scientific uniformity with reference to composition, use or value." Allied Stores of Ohio v. Bowers. 358 U.S. 522, 527, 79 S. Ct. 437, 3 L. Ed.2d 480 (1959) (emphasis added). Moreover, the fact the legislative classification created by a stature need only be rationally related to a legitimate interest where no fundamental right or suspect classification is involved has been recognized by the New Jersey Supreme Court. See Greenberg v. Kimmelman. 99 N.J. 552, 565 (1985) . In fact, even if the legislative classification has the effect of treating some differently from others, as long as it bears some rational relationship to a permissible state interest the legislative classification will be presumed valid. See Schneider v. City of East Oranae. 196 N.J. Super. 587 (App. Div. 1984), affd. 103 N.J. 115 (1986). With respect to the Cigarette Tax Act, the Sales and Use Tax Act, and the Jenkins Act, it is clear that these Acts do not operate to deprive purchasers of cigarettes of their right to equal protection under the Fourteenth Amendment. As set forth at length above, the Legislature enjoys broad discretion in creating classifications where no suspect class or fundamental right is implicated. As purchasers of unlicensed cigarettes are not exercising a fundamental right and do not constitute a suspect class, as long as the Legislature's classification is rationally related to a legitimate state interest, the Act will withstand constitutional scrutiny. It should be noted that the legitimacy of the state's levying of taxes on cigarettes has been recognized in cases dealing with both the Cigarette Tax Act and the Jenkins Act. In Lane Distributors v. Tilton, 7 N. J. 349, 359 (1951), the New Jersey Supreme Court, in discussing the Cigarette Tax, noted that "it is beyond question that the state can levy an excise tax on any commodity and can levy a license tax against persons engaged in any business. Such taxes are imposed under the power to raise revenue not under the police power." Additionally, in Consumer Mail Order Ass'n of America v. McGrath, 94 F. SUPP. 705 (D. D.C. 1950), aff'd. 71 S. Ct. 500, 340 U.S. 925, 95 L. Ed. 668, the District Court held that the Jenkins Act requirement that persons selling or disposing of cigarettes in interstate commerce forward customer lists to the tobacco tax administrator of the state into which the shipments are made is a valid exercise of the federal commerce power in aid of state law, and does not violate due process of law notwithstanding the fact that goods other than cigarettes are free from this regulation. See also United States v. Morris, 516 F. 2d 959 (4th Cir. 1975)(holding the Jenkins Act does not violate due process, despite the fact that this section only regulates the interstate sale of cigarettes and does not similarly regulate the sale of little cigars). The legitimacy of the legislative goals accompanying the taxation of cigarettes pursuant to the Cigarette Tax Act, Sales and Use Tax, and Jenkins Act are articulately set forth in the New Jersey Supreme Court's decision in Neeld v. Giroux, supra, 24 N.J. at 224. In discussing the very principles at issue here, the Court recognized that [t]he cigarette tax is an important source of state revenue. The opportunities for evasion are evident and evasion has been so widespread that the Congress enacted the Jenkins Act, 15 U.S.C.A. s 375 et-seq. to assist states in the collection of sales and use taxes on cigarettes. [Id. at 228.] The Court went on to cite the Senate Report accompanying the Jenkins Act, which found "[t]he avoidance of State sales and use taxes on cigarettes by interstate shipments to consumers in States taxing cigarettes is depriving the States of large amounts of sorely needed revenue." Id. (citing 1949 U.S. Code Conq. Service, p.2159). It is against the backdrop of presumed constitutionality that it becomes apparent that Appellant's Equal Protection Clause arguments regarding the Cigarette Tax Act, the Sales and Use Tax Act, and the Jenkins Act are unfounded. As set forth in the Neeld decision, the evasion of taxes on cigarettes is rampant, and the Jenkins Act operates to assist states such as New Jersey in their efforts to prevent the staggering loss of revenue that results from the purchase of cigarettes from unlicensed distributors such as Smoke's Advantage. While Appellant appears to recognize the validity of New Jersey's right to tax cigarettes, Appellant takes issue with the amount of taxes levied under the Cigarette and Sales and Use Taxes imposed, arguing that it is excessively discriminatory. However, Appellant fails to recognize the discretion the Legislature has in varying the amount of excise tax imposed on any product, including cigarettes. See Allied Stores, supra, 358 U.S. at 527. The Legislature's legitimate goals of generating revenue and avoiding revenue loss is undeniable, and clearly drove the type of taxes and the amount of taxes imposed under both the Cigarette Tax and the Sales and Use Tax Acts. Finally, similarly without merit is Appellant's argument regarding the Legislature's amendment of the Sales and Use Tax Act in 1990, N.J.S.A. 54:32B-8.24, repealed by L^ 1990, c^ 40, § 11, which had the effect of negating the exemption from taxation under the Sales and Use Act cigarettes that are subject to tax under the Cigarette Tax Act. Appellant offers nothing other than his personal beliefs to support his contention that the Legislative goals underlying this legislation was illegitimate, and thus fails to overcome the presumed constitutionality of the 1990 amendment to the Sales and Use Tax Act. Aside from the fact that this legislative amendment had the effect of repealing the exemption of Sales and Use Tax on numerous items in addition to cigarettes, including the renting and leasing of trucks, tractors, trailers and semitrailers, Appellant's arguments do not address the fact that the Assembly Appropriations Committee Statement to this bill revealed an expected revenue gain of $75 million from cigarettes resulting from an end to their exemption from the Sales and Use Tax. See Assembly Appropriations Committee Statement, Assembly, No. 3610 - L. 1990, c. 40. Appellant has failed to provide this Court with any basis to find this legislation is unconstitutional. Indeed, there can be little doubt as to the constitutional viability of this Sales and Use Tax Act amendment when, as set forth previously, due deference is given to the Legislature's right to create classifications,
particularly where taxation is concerned. Clearly, the Legislature identified cigarettes, among other items, as important sources of state tax revenue. In failing to provide any valid basis to question the presumed legitimacy of the Legislature in enacting this revenue-generating measure, this Court should reject Appellant's arguments with regard to the constitutionality of the 1990 amendment to the Sales and Use Tax Act. B. THE JENKINS' ACT REQUIREMENT THAT CIGARETTE PURCHASE INFORMATION BE TURNED OVER TO THE STATE TOBACCO TAX ADMINISTRATOR DOES NOT VIOLATE APPELLANT'S RIGHT TO PRIVACY The New Jersey Supreme Court examined in detail the right to privacy in Doe v. Poritz, supra, 142 N.J. at 77-91, in which the Court recognized that this right is grounded in the Fourteenth Amendment's concept of personal liberty. This right has an analog in Article I, Paragraph 1 of the New Jersey Constitution. State v. Saunders, 75 N.J. 200, 210, 216 (1977). In Doe v. Poritz, the Court noted that the right of privacy safeguards at least two different kinds of interests: 'the individual interest in avoiding disclosure of personal matters,' and 'the interest in independence in making certain kinds of important decisions.' . . . Those interests have been characterized as the 'confidentiality' and 'autonomy' strands of the right of privacy. . . . The right to confidentiality encompasses two strands: 'the right to be free from the government disclosing private facts about its citizens and from the government inquiring into matters in which it does not have a legitimate and proper concern.' [Id. at 77-78 (citations omitted).] In assessing an individual's claim of infringement upon the right to confidentiality, a court must determine "whether, and to what extent, [the individual] has a reasonable expectation of privacy in the information disclosed [,]" . . . [and,] [i]f there is a reasonable expectation of privacy in the information disclosed, [the court] must decide whether the intrusion on the right to privacy is justified, balancing the governmental interest in disclosure against the private interest in confidentiality." Id. at 78 (citations omitted).
In determining whether the state interest justifies disclosure, the Court in Doe v. Poritz noted that courts in the Third Circuit have considered the following factors: "(1) the type of record requested; (2) the information it does or might contain; (3) the potential for harm in any subsequent nonconsensual disclosure; (4) the injury from disclosure to the relationship in which the record was generated; (5) the adequacy of safeguards to prevent unauthorized disclosure; (6) the degree of need for access; and (7) whether there is an express statutory mandate, articulated public policy, or other recognized public interest mitigating toward access." Id. at 88 (citing United States v. Washington Elec. Corp., 638 F. 2d 570, 578 (3d Cir. 1980) and Faison v. Parker, 823 F. SUPP. 1198, 1201 (E.D. Pa. 1993)). Applying these principles to the instant matter, the Tax Court properly concluded that the disclosure of Appellant's purchase information to the Director by Smoke's Advantage, pursuant to the Jenkins Act, did not violate his constitutional right to privacy. The Tax Court noted that, other than being subjected to Cigarette and Sales and Use Taxes, there was no demonstrable injury to Appellant from disclosure of his purchase infprmatj._gn_._ Additionally, the Tax Court mentioned the well-articulated public policy of preventing tax evasion, as set forth in Neeld v. Giroux, supra, 24 N. J. at 228, which mitigates for disclosure of the purchase information pursuant to the Jenkins Act. Moreover, there is no indication that this information is shared by Smoke's Advantage with any party other than the tax administrator of the state and, in the case of New Jersey, once this information is in the hands of the Director, it is further jsafeguarded from access by third parties pursuant to the \j confidential records provisions of the State Uniform Tax Procedure Law, set forth at N.J.S.A. 54:50-8. Additionally, Appellant fails.to provide any valid basis to question the constitutionality of the Jenkins Act's requirement that unlicensed distributors of cigarettes turn over purchase information to the state. Moreover, the Director had no basis to question either the propriety of the federal requirement that this purchase information be furnished by Smoke's Advantage under the Jenkins Act, or the veracity and credibility of this information. Indeed, under the express provisions set forth in the Jenkins Act, the purchase information provided to the Director by Smoke's Advantage is "presumptive evidence (1) that such cigarettes were sold, or transferred for profit, by such person, and (2) that such sale or transfer was to other than a distributor licensed by or located in such State." See 15 U.S.C. § 376(b). Thus, the Director acted properly in relying on the purchase information provided by Smoke's Advantage in assessing Appellant with Cigarette and Sales and Use Taxes. Therefore, this Court should affirm the Tax Court's finding that Appellant had no fundamental right under the federal or state constitution to prevent his cigarette purchase information from being turned over to the Director and, even if this right is deemed fundamental, which the Tax Court rejected, the State nevertheless has a compelling and substaritj:jaj^_aie£d__£or__this_ purchase information which far outweighs Appellant's privacy interest in it.
Appellant argues, as he did unsuccessfully before the Tax Court and this Court in his motion for leave to appeal, that Judge Kuskin should have disqualified himself as the trial judge in this matter, after inquiring about whether Appellant was aware of the enactment of the Tax Amnesty provisions, particularly the 5% penalty imposed under N.J.S.A. 54:53-18b. As Judge Kuskin properly determined, in his sound___^ii^cretion, disqualification was not warranted pursuant to New Jersey Court Rules 1:12-1 and 1:12-2, this Court should reject Appellant's arguments that the Tax Court's inquiry into Appellant's knowledge of the then recently enacted Tax Amnesty provisions constituted improper "threat bargaining" on the part of Judge Kuskin, or otherwise warranted his disqualification as trial judge. As way of background, the purpose of Judge Kuskin's scheduling of a conference call between the parties on May 31, 2002 was to inquire as to Appellant's awareness of the enactment of the Tax Amnesty provisions, particularly the 5% penalty imposed under N.J.S.A. 54:53-18b, which provides that There shall be imposed a 5% penalty, which shall not be subject to waiver or abatement, in addition to all other penalties, interest, or costs of collection otherwise authorized by law, upon any State tax liabilities eligible to be satisfied during the period established pursuant to subsection a. of this section that are not satisfied during the amnesty period. See also N.J.A.C. 18:39-1.5(d). This section of the Tax Amnesty Act was enacted pursuant to P. L. 2002, c_. 6, effective March 18, 2002, under which New Jersey established its third Tax Amnesty, which is an opportunity for delinquent taxpayers to clear up tax obligations for all State taxes administered and collected by the Division of Taxation, without civil or criminal penalties and without interest. Under Tax Amnesty, a taxpayer pays only the actual tax owed; all penalties and interest that may have accrued are waived. The Tax Amnesty Act of 2002 authorized the Director to designate a tax amnesty period of up to 60 days to end no later than June 10, 2002. Eligible State tax liabilities included all unpaid delinquencies, deficiencies or additional assessments reportable on tax returns due on or after January 1, 1996 through December 21, 2001. See N.J.S.A. 54:53-18. In deciding whether he should disqualify himself as trial judge in light of his conversation with the parties regarding Appellant's tax amnesty eligibility, Judge Kuskin properly considered the standards set forth in R. 1:12-1 and R. 1:12-2 in rejecting Appellant's claims. Specifically, R. 1:12-1 provides, in pertinent part: The Judge of any court shall be disqualified on the court's own motion and shall not sit in any matter . . . (f) when there is any other reason which might preclude a fair and unbiased hearing and judgment, or which might reasonably lead counsel or the parties to believe so. R. 1:12-2 applies where the motion for recusal is sought by one of the parties. The Comment to R. 1:12-2 states that the "disposition of such a motion rests in the 'sound discretion' of the judge whose recusal is sought." (quoting Panitch v. Panitch, 339 N. J. Super. 63, 66 (App. Div. 2001)) . Moreover, it is "improper for a court to recuse itself unless the factual bases for its disqualification are shown by the movant to be true or are already known by the court." State v. Marshall. 148 N.J. 89, 275 (1997) . Despite Appellant's arguments to the contrary, the Tax Court properly denied Appellant's motion to disqualify Judge Kuskin as trial judge. Judge Kuskin's statement that Appellant did not deny purchasing the cigarettes in question was merely an acknowledgment of what failed to appear on the face of Appellant's complaint^ (i.e., any claim that Appellant did not purchase the cigarettes in question).. This inquiry did not tend to show pre-judgment or bias on the part of Judge Kuskin in this matter. Appellant was in no way required to take advantage of the tax amnesty program, under which his Cigarette and Sales and Use Tax assessments qualified for payment. The purpose of Judge Kuskin's conference call regarding the amnesty program was merely for the benefit of Appellant to resolve the matter without incurring additional interest and penalty costs. (1T18). £>/', M-tv/ ls ie^c^Y Appellant was not coerced to accept tax amnesty, but merely advised of the penalty provisions set forth in N.J.S.A. 54:53-18b, which were ultimately incorporated into the Tax Court's Order and Judgment in this case. (2T33; K1-K2). Thus, as Judge Kuskin properly denied Appellant's motion to recuse him as trial judge in his sound discretion, and Appellant fails to offer any viable basis to warrant characterizing the Tax Court's actions as "threat bargaining" based on the imposition of the tax amnesty 5% amnesty penalty in this case, this Court should affirm the Order and Judgment of the Tax Court.
PETER C. HARVEY |