Declaratory Judgment Available for Untimely LUCT Assessments Raising Pure Questions of Statutory Authority (Despite Missed RSA 79-A:10 Appeal Deadline)

Case: McMaster Development, LLC v. Town of Derry (N.H. Sup. Ct. No. 2025-0131)  |  Date: September 16, 2026

1. Introduction

This appeal arose from a dispute over the Town of Derry’s assessment of a land use change tax (LUCT) after land previously taxed under New Hampshire’s “current use” regime was developed into residential lots. The plaintiff, McMaster Development, LLC (McMaster), purchased three subdivided lots, built homes, and sold the lots to third parties. Over a year later, the Town assessed a $15,000 LUCT for each lot and billed the new owners, who then sought payment from McMaster. McMaster paid under protest and pursued abatements, but the Town allegedly failed to give notice of denial and later asserted the appeal window had expired.

The central procedural issue was whether McMaster’s failure to timely pursue an appeal under the LUCT abatement statute, RSA 79-A:10, barred a later declaratory judgment action asserting that the Town’s LUCT invoices were untimely under RSA 79-A:7, II(c) and therefore beyond the Town’s statutory taxing authority.

2. Summary of the Opinion

The Supreme Court of New Hampshire reversed the superior court’s dismissal and remanded. Although McMaster did not comply with the eight-month appeal deadline in RSA 79-A:10, III, the Court held that the statutory abatement process is not the sole remedy when the taxpayer’s claim presents a pure question of law regarding the legality of the assessment—specifically, whether the municipality acted outside the time limits that define its statutory authority to mail a LUCT bill under RSA 79-A:7, II(c).

Key holding: A taxpayer may pursue a declaratory judgment action challenging the legality of a LUCT assessment as exceeding statutory authority when the claim turns on interpretation of RSA 79-A:7, II (a question of law), even if the taxpayer did not timely appeal through the RSA 79-A:10 abatement process.

3. Analysis

3.1 Precedents Cited

  • Barufaldi v. City of Dover, 175 N.H. 424 (2022)
    Cited for the motion-to-dismiss posture: on appeal from dismissal, the Court assumes the truth of facts alleged in the complaint and attached documentation. This framing mattered because the timeliness challenge and notice-related allegations were treated as true for purposes of deciding whether dismissal was proper.
  • Ortolano v. City of Nashua, 177 N.H. 359 (2025), 2025 N.H. 23
    Provided the contemporary articulation of the motion-to-dismiss standard: the Court tests whether allegations are “reasonably susceptible” to a construction permitting recovery, and it may consider attached documents, undisputed-authentic documents, and public records. This allowed the Court to focus on the legal sufficiency of McMaster’s theory (a statutory-authority challenge) rather than factual proof at this stage.
  • Signal Aviation Servs. v. City of Lebanon, 164 N.H. 578 (2013)
    Reaffirmed the general rule that New Hampshire tax abatement statutes are remedial and ordinarily provide the “exclusive remedy” for dissatisfaction with an assessment (there, under RSA chapter 76). The Court in McMaster used Signal Aviation both to acknowledge the baseline exclusivity principle and to situate the recognized exception for purely legal challenges (discussed via Pheasant Lane).
  • Appeal of City of Concord, 161 N.H. 169 (2010)
    Demonstrated the Court’s strict enforcement of LUCT abatement timing and jurisdictional prerequisites: the BTLA lacked jurisdiction when the abatement request itself was untimely. The Town relied on this strictness theme; the Court accepted the theme generally but distinguished it where the taxpayer raises a pure legality question.
  • Appeal of Estate of Van Lunen, 145 N.H. 82 (2000)
    Similarly emphasized strict compliance with appeal deadlines in the abatement framework. The Court cited it to confirm that, ordinarily, missing the statutory path is fatal—again, subject to the question-of-law exception.
  • Phetteplace v. Town of Lyme, 144 N.H. 621 (2000)
    Cited for the proposition that compliance with statutory appeal deadlines is a “necessary prerequisite” to jurisdiction over a tax abatement appeal. Importantly, McMaster did not dispute this point; instead, it framed the case as falling outside the abatement appeal channel because it sought judicial determination of statutory authority.
  • Pheasant Lane Realty Trust v. City of Nashua, 143 N.H. 140 (1998)
    The cornerstone precedent for the exception: the Court held that failure to request an abatement under RSA chapter 76 did not bar a declaratory judgment/injunctive action where the “only substantive issue” was the legality of the assessment—whether the city had statutory authority to issue a supplemental assessment. McMaster extended the same reasoning to the LUCT context because the complaint asked the court to interpret the statute defining the Town’s authority to mail LUCT bills.
  • Porter v. Town of Sandwich, 153 N.H. 175 (2006)
    Reinforced and described Pheasant Lane as holding that a plaintiff raising a question of law is “not necessarily required” to follow the abatement procedure. In Porter, the taxpayers’ claims posed questions about the legality of the assessment; therefore noncompliance with the abatement procedure did not bar the action. McMaster treated this principle as applicable to LUCTs because RSA chapter 76’s abatement scheme is analogous to RSA 79-A:10.
  • Maplevale Builders v. Town of Danville, 165 N.H. 99 (2013)
    Cited as contextual support on LUCT timeliness: the Court had previously vacated and remanded for determination of the “change in use date” and whether, based on that date, LUCT bills were timely—implying that the change-in-use date can matter to timeliness under RSA 79-A:7, II. McMaster noted that the Court had not “directly address[ed]” the precise statutory interpretation question presented here under the current version, underscoring that McMaster’s claim was genuinely legal in nature.

3.2 Legal Reasoning

The superior court dismissed because McMaster did not timely appeal under RSA 79-A:10, III, which requires an aggrieved person to appeal a municipality’s denial of, or neglect to rule upon, a LUCT abatement request within eight months of the notice of tax date. On appeal, McMaster conceded noncompliance with that deadline.

The Supreme Court reframed the dispositive inquiry: whether McMaster’s claim was the type that must be funneled exclusively through the abatement-and-appeal mechanism, or whether it fell within the established exception for purely legal challenges to a municipality’s taxing authority.

The Court acknowledged the general exclusivity and strict-deadline enforcement in tax abatement law, but reiterated the exception: exhaustion of administrative remedies is not required “where the issue on appeal is a question of law rather than a question of the exercise of administrative discretion,” as articulated in Pheasant Lane Realty Trust v. City of Nashua and summarized in later cases.

Applying that framework, the Court examined the “nature of McMaster’s claim.” The complaint sought interpretation of RSA 79-A:7, II(c), which provides that a LUCT bill:

“shall be mailed, at the latest, within 18 months of the date upon which the local assessing officials receive written notice of the change of use from the landowner or his or her agent, or within 18 months of the date the local assessing officials actually discover that the land use change tax is due and payable.”

The Court characterized McMaster’s challenge as a question of statutory interpretation “bearing upon the legality of the LUCT assessments”: what date triggers the 18-month window that defines the Town’s authority to mail the tax. Because that issue is legal—rather than a discretionary valuation judgment or a fact-intensive administrative determination—the Court held McMaster was not required to comply with RSA 79-A:10, III to bring the declaratory judgment action. The dismissal was therefore error.

Notably, the Court did not decide whether the Town’s bills were in fact untimely. It held only that the courthouse door was not closed by the missed abatement appeal deadline when the pleading targets the Town’s statutory authority to tax under the timing provision.

3.3 Impact

  • Clarifies an exception in the LUCT context: While the question-of-law exception was established in RSA chapter 76 cases, McMaster confirms that analogous reasoning applies to LUCT disputes under RSA chapter 79-A when the claim challenges the legality of the assessment (authority/timeliness), not discretionary administration.
  • Increases the viability of declaratory judgment actions in tax timing-authority disputes: Taxpayers who miss RSA 79-A:10 appeal deadlines may still litigate if they can plausibly frame the issue as statutory authority (e.g., whether statutory preconditions to assessment were satisfied) rather than as an abatement merits dispute.
  • Encourages municipal compliance with statutory timing limits: By permitting direct judicial review of timeliness/authority claims, municipalities face increased risk that late-mailed LUCT bills can be challenged outside the administrative appeal pipeline.
  • Future litigation will likely focus on line-drawing: Courts and litigants will need to distinguish (a) legal challenges to the existence of taxing authority (including statutory time limits) from (b) disputes requiring administrative discretion or factfinding traditionally handled in abatement proceedings.
  • Open statutory question preserved for remand: The Court emphasized it had not directly addressed the precise trigger for RSA 79-A:7, II(c)’s 18-month window under the current statutory scheme. The remand tees up potential precedent on what constitutes “written notice,” “change of use,” and “actually discover,” and how those concepts interact with recorded deeds, subdivision approvals, and subsequent transfers.

4. Complex Concepts Simplified

  • Land Use Change Tax (LUCT): A tax imposed when land that benefited from “current use” taxation (lower taxes for qualifying open space, farm, or forest land) is later changed to a non-qualifying use (often development). The LUCT recaptures some tax benefit associated with the prior preferential treatment.
  • RSA 79-A:7, II(c)’s “18-month” limitation: This is a statutory deadline for when the municipality must mail the LUCT bill, keyed to either (1) receipt of written notice from the landowner/agent or (2) the date the officials “actually discover” the tax is due. In practice, the fight is often about what event starts the clock.
  • Abatement and appeal under RSA 79-A:10: An “abatement” is a request to reduce or cancel a tax assessment. RSA 79-A:10 provides a process and deadline to appeal municipal action or inaction—often treated as jurisdictional in ordinary assessment disputes.
  • Exhaustion of administrative remedies: The usual rule that a party must use and complete the statutory administrative process before going to court. New Hampshire recognizes an exception where the issue is purely legal (statutory authority/legality), not an administrative discretion call.
  • Declaratory judgment action: A lawsuit asking the court to declare the parties’ rights under a statute or contract—here, whether the Town’s taxing action was lawful under the statutory time limit.
  • Motion to dismiss standard: At this early stage, the court assumes pleaded facts are true and asks whether the law could provide relief on that version of events. The Supreme Court’s reversal means only that McMaster stated a claim that may proceed; it is not a ruling that McMaster ultimately wins on the timeliness merits.

5. Conclusion

McMaster Development, LLC v. Town of Derry extends (and concretely applies) New Hampshire’s question-of-law exception to tax-abatement exhaustion in the LUCT setting. Even when a taxpayer misses RSA 79-A:10’s appeal deadline, a declaratory judgment action may proceed if it squarely challenges the municipality’s statutory authority—here, whether RSA 79-A:7, II(c) barred the Town from mailing LUCT invoices outside the 18-month window. The decision preserves strict enforcement of abatement deadlines for ordinary assessment disputes, while confirming that courts remain available to adjudicate purely legal challenges to the legality of a tax.