Jones Act Tax Sales

Tue. Jan. 31, 2023
This page briefly introduces the "Jones Act" tax sale/assignment, a tool allowing local New Jersey municipal government finance officials to dispose of problematic tax liens.

The 'Jones Act'

This is a summary of one section of New Jersey's Tax Sale Law (N.J.S.A. Title 54) commonly known as "The Jones Act".

(Note: The "Jones Act" that is the topic of this web page is not the federal maritime law also known as the "Jones Act". Under the federal maritime Jones Act, maritime workers (seamen) can file claims for pain and suffering when they are injured in the course of their work on a vessel, if their injuries were allegedly caused by the owners negligence or unseaworthiness of the vessel.)

Typically, Tax Sale Certificates that were not sold at the original tax sale, and have been held by the municipality for any length of time, are compromised by a bankruptcy of the property owner, or by significant problems associated with the properties, including environmental contamination.

The “Jones Act” (N.J.S.A. 54:5-114.2 et seq) is a New Jersey law enabling municipalities to dispose of problematic tax liens, and thus:

1. Improve Cash Flow;
2. Improve Tax Collection Ratios;
3. Return Properties to the Tax Rolls;
4. Avoid Liability for Contaminated Properties; and
5. Facilitate Redevelopment of Problematic Properties.

A Jones Act sale, like a regular tax sale, is a public auction of delinquent municipal property tax liabilities, designed to facilitate municipal finance. The difference is that at a Jones Act sale the Collector is trying to sell problematic tax liens that could not previously be sold at full price, and are being offered at a discount.

Just as retailers mark down merchandise, rather than having it sit around becoming even less sellable, municipalities can do the same thing via the Jones Act.

This web page is only a synopsis for your review. If your municipality has one or more significant Tax Sale Certificates that were "struck off" to the municipality's account, and are ongoing liabilities, but for various reasons may not be viable candidates for an In Rem tax foreclosure, we encourage you to investigate the viability of conducting a Jones Act Tax Sale.

Related Links + Downloads:

  • Please click here to view and download Cherokee's Summary of the Jones Act section of New Jersey's Tax Sale Law in PDF format.

    • Cherokee's Community Development information
    • New Jersey Municipal Associations (redirects to a web page on the NJ State League of Municipalities web site).
    • (Additional links coming soon.)

      The information on this web page is only a summary of the topic discussed, namely the Jones Act section (N.J.S.A. 54:5-114.2) of New Jersey's Tax Sale Law. Cherokee represents that it made a good faith effort to accurately and concisely convey the key concepts of the Jones Act. However Cherokee can not, and does not, guarantee or warranty the accuracy of same, and this is provided "as is" without representation of any kind.

      For more information, please visit the web site of The Tax Collectors and Treasurers Association of New Jersey.