Michael Giammarino v. Director, Division of Taxation

New Jersey Superior Court Appellate Division·Decided August 25, 2026·No. A-1407-25·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-1407-25

MICHAEL GIAMMARINO and ROSEANN GIAMMARINO,

Plaintiffs-Respondents,

v.

DIRECTOR, DIVISION OF TAXATION,

Defendant.

NEW JERSEY OFFICE OF LEGISLATIVE SERVICES and GABRIEL R. NEVILLE, ESQ.,

Appellants.

Argued April 14, 2026 – Decided August 25, 2026 Before Judges DeAlmeida and Torregrossa-O'Connor.

On appeal from an interlocutory order of the Tax Court of New Jersey, Docket No. 001040-2024.

Steven Siegel argued the cause for appellants (Cullen & Dykman LLP, attorneys; Leon J. Sokol, of counsel and on the briefs; Steven Siegel, on the briefs).

Reuben Muller argued the cause for respondents Michael Giammarino and Roseann Giammarino (Cole Schotz PC, attorneys; Lauren M. Manduke and Julie A.

Ficks, of counsel and on the brief).

Jennifer Davenport, Attorney General, attorney for Director, Division of Taxation (Anthony D. Tancini, Deputy Attorney General, on the statement in lieu of brief).

PER CURIAM On leave granted, non-parties New Jersey Office of Legislative Services (OLS), and its Legislative Counsel, Gabriel R. Neville, appeal from the November 10, 2025 Tax Court order denying, in part, their motion to quash a subpoena seeking the production of documents and communications relating to the July 1, 2018 enactment of a statute increasing the gross income tax (GIT) marginal tax rate on income over $5 million beginning January 1, 2018. We affirm substantially for the reasons stated by Tax Court Judge Joshua D. Novin in his comprehensive November 10, 2025 written decision.

I.

On February 8, 2018, Assembly Bill No. 3088 (A-3088) was introduced in the General Assembly. The bill proposed amendments to N.J.S.A. 54A:4-7,

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a provision of the Gross Income Tax Act (GIT Act), N.J.S.A. 54A:1-1 to -12-6, relating to the New Jersey earned income tax credit program (EITC), and did not propose an increase in the GIT marginal tax rate. At the time A-3088 was introduced, two bills pending in the Senate also proposed statutory amendments to the GIT Act relating to EITC. Neither Senate bill proposed an increase in the GIT marginal tax rate. On April 5, 2018, another bill was introduced in the Senate proposing GIT Act amendments relating to the EITC. That bill also did not propose an increase in the GIT marginal tax rate.

On May 8, 2018, plaintiffs, a married couple, then New Jersey residents, engaged in two commercial transactions involving the sale of their interest s in Ferraro Foods, Inc. As a result of the transactions, plaintiffs realized capital gains of approximately $316 million.

On June 18, 2018, A-3088 and the three bills pending in the Senate were combined under A-3088, and the bill was revised. After the revision, A-3088 proposed several amendments to the GIT Act. Those proposals included an increase in the deduction for local property taxes, amendments related to the EITC, and amendments relating to the taxation of investment management services. The revised A-3088 did not propose an increase in the GIT marginal tax rate. On June 21, 2018, the revised A-3088 passed the General Assembly

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and the Senate. The bill was passed as a component of the State's Fiscal Year (FY) 2019 budget.

On June 30, 2018, Governor Murphy conditionally vetoed A-3088. In a statement accompanying the conditional veto, the Governor stated he "had some problems with the revenue side of the Legislature's original [FY] 2019 budget." Governor's Recommendations for Reconsideration Statement to Assemb. Comm. Substitute for Assemb. Bill No. 3088 (June 30, 2018). The Governor returned A-3088 to the Legislature for reconsideration with what he described as "a modest increase in the income tax for multi-millionaires to ensure that all New Jerseyans begin to pay a fair share to support important investments like those included in this bill." Ibid. The Governor proposed amending N.J.S.A. 54A:2-1, a provision of the GIT Act, to increase the GIT marginal tax rate on income over $5,000,000.

At the time of the conditional veto, the highest GIT marginal tax rate for married individuals filing a joint tax return for tax years beginning on or after January 1, 2004, on taxable income over $500,000 was "$27,807.50 plus 8.970% of the excess over $500,000.00." N.J.S.A. 54A:2-1(a)(5) (2017). The Governor proposed an amendment to add an additional GIT marginal tax rate for married couples filing a joint return for tax years beginning on or after January 1, 2018,

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on income over $5,000,000 of "$431,457.50 plus 10.75% of the excess over $5,000,000.00." N.J.S.A. 54A:2-1(a)(6).1 On June 30, 2018, the General Assembly passed the Governor's proposed amendments to A-3088. On July 1, 2018, the Senate passed the Governor's proposed amendments to A-3088.

On July 1, 2018, the Governor approved the amended A-3088. L. 2018, c. 45 (Chapter 45). The law took effect immediately and applies to all income earned in the tax year beginning January 1, 2018, thereby capturing the capital gains plaintiffs realized from the May 8, 2018 transactions. L. 2018, c. 45, § 12.

The OLS is an agency of the Legislature established "to aid and assist the Legislature in performing its functions . . . ." N.J.S.A. 52:11-55. Among other statutory responsibilities, the OLS is to "[p]rovide, upon request, legal, fiscal, research, information and administrative services and assistance for the Legislature, its officers, committees, commissions, members and staff." N.J.S.A. 52:11-58(b)(1).

1 The Governor also proposed amendments increasing the GIT marginal tax rate for married individuals filing separately, and taxpayers with other filing statuses. Those amendments, which were enacted by the Legislature, are not before the Tax Court.

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OLS is statutorily authorized to issue fiscal notes associated with the enactment of legislation. N.J.S.A. 52:13B-6 provides:

Whenever any bill is introduced in either the Senate or General Assembly . . . the bill shall be immediately reviewed by the Legislative Budget and Finance Officer [(LBFO)] in the [OLS]. If, upon that review, the [LBFO] determines that the bill may increase or decrease expenditures or increase or decrease revenues of the State . . . the [LBFO] shall immediately forward a request for a fiscal note to the Director of the Division of Budget and Accounting [(DDBA)] in the Department of the Treasury.

The DDBA thereafter forwards the request for a fiscal note to the agency required to carry out the purposes of the bill, if enacted. N.J.S.A. 52:13B-7(a). The appropriate agency within twenty business days prepares and returns to the DDBA a fiscal note "containing the most accurate estimate possible, in dollars, concerning the amount by which expenditures or revenues will be increased or decreased for the State . . . ." N.J.S.A. 52:13B-7(b). Within five business days after receiving the fiscal note, the DDBA returns the fiscal note to the LBFO with his or her notes regarding its accuracy. N.J.S.A. 52:13B-7(c). The LBFO may add his or her own comments with respect to the accuracy of the fiscal note. N.J.S.A. 52:13B-8.

When the LBFO

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has not received a fiscal note from the [DDBA] by a date consistent with legislative consideration, the [LBFO] shall cause a legislative fiscal estimate to be produced by the [OLS] as soon as practicable. The legislative fiscal estimate shall contain the same information as would be included in a fiscal note.

[N.J.S.A. 52:13B-9.]

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