NJ Tax Court Grants Veterans' Tax Break to DP

March 16, 2005

NEWARK— A gay, disabled veteran who owns a home with his partner should receive the same tax break that a married veteran would receive, a judge has ruled.

The decision by a Tax Court judge means the veteran, Louis Paul Hennefeld, who served in the Air Force during the Korean and Vietnam wars, will not have to pay property taxes in his hometown of Montclair.

Gay rights advocates on Wednesday hailed the ruling by Judge Vito L. Bianco as a victory for their cause.

Bianco's decision, issued Tuesday, hinged on New Jersey's new Domestic Partnership Act and overturned a judgment of the Essex County Board of Taxation.

Bianco ruled that Hennefeld, 72, and his companion should be 100 percent exempt from property taxes, the same as a 100 percent disabled veteran would get, even if he or she was not the sole owner of the home.

It's clearly a full victory for my clients, said Fernando M. Pinguelo, the lawyer for the couple.

Montclair attorney Alan G. Trembulak said he doubted the township would appeal because the Legislature is likely to explicitly grant such exemptions to veterans in same-sex relationships.

The case stems from a lawsuit brought by Hennefeld and companion Blair William O'Dell, 60, against Montclair in September, two months after the partnership act became law. They contended that Montclair discriminated against them by continuing to give only a 50 percent tax break. Each has owned half their home since moving to Montclair in 1985.

Since 1953, the state Constitution granted tax exemptions to honorably discharged veterans in proportion to the extent of the disability. For example, a fully disabled veteran would get a 100 percent exemption. The property occupied by a married, fully disabled veteran got the full exemption even if the veteran owned it with a spouse.

The couple, who have been together since 1975, sought a 100 percent exemption in January 2004 from the township, but again received 50 percent off their annual levy of $17,600. They appealed to the county board.

Montclair argued that the Legislature did not intend the couple to be treated as domestic partners before July, when the act was adopted, and questioned whether it had the authority to grant a full exemption afterward.

Noting that the Domestic Partnership Act bars gay marriage and does not mention the veteran's exemption, the judge observed that it would be unfortunate if the couple needed to transfer ownership of the entire home to Hennefeld to qualify for a full exemption.

In the court's view, that option clearly defeats the express intent of the DPA to support the many adult individuals in this state who share an important personal, emotional and committed relationship with another adult, Bianco wrote, quoting Legislative findings.

The judge also noted that the Legislature is now considering extending full exemptions to same-sex domestic partnerships involving a veteran.

O'Dell noted that the judge did not recognize their Canadian marriage and other points. But it's one step at a time, and I'm very pleased with the outcome, he said. O'Dell said Hennefeld, a staff sergeant when he left the service in the late 1960s, was not available for comment.

Hennefeld and O'Dell had a civil union in Vermont in 2000 and were married in Canada in 2003.

The judge found that New Jersey does not recognize the Canadian marriage, and does not have to accept aspects of Vermont's civil union that go beyond the Domestic Partnership Act.

A gay rights advocate, David Buckel of Lambda Legal, called the ruling a great step forward for gay families in New Jersey, especially those who served our country in the armed forces.

However, This judge would not have had to struggle with this if they had the freedom to marry in New Jersey, said Buckel, who is lead lawyer for gay couples whose lawsuit seeking to legalize same-sex marriage in New Jersey is being considered by the state Appellate Court.

Bianco did outline limits to his ruling, including that he did not decide whether O'Dell has any right, if Hennefeld dies, to continue to claim the veteran's exemption.

Commented O'Dell, all of our points were very, very narrowly interpreted.