Transcontinental Gas Pipe Line Corporation, Plaintiff-Appellant v. Bernards Township, Defendant-Respondent…

Summary

The Supreme Court of New Jersey held that the proper valuation method for interstate natural gas pipelines for ad valorem tax purposes is depreciated replacement cost, rejecting the municipality's assessment based on a flawed methodology and remanding for an independent Tax Court determination. The Court also affirmed that the presumption of validity of a municipal assessment can be overcome when the assessment method is arbitrary or capricious, and that FERC regulatory valuations are not controlling for tax purposes.