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Volume 1 - Opinions of Counsel SBEA No. 15

Opinions of Counsel index

Educational organizations - Real Property Tax Law, § 421:

The fact that a private school does not employ traditional teaching methods does not necessarily defeat its right to a tax exemption.

A bona fide, nonprofit educational institution is entitled to exemption pursuant to section 421 of the Real Property Tax Law. If the school in question is meant to provide elementary and/or secondary education for children, then accreditation by the New York State Board of Regents would be necessary to prove the bona fide nature of the activity in terms of “education” as contemplated by the statute. If the education is for some other purpose such as art or music, then the applicant should be prepared to prove that there will be an ordered and valid program of study leading to some state of achievement in the subject or subjects which are taught.

In addition, compliance with the requirements of the statute must be proven to the satisfaction of the local assessor.

In determining whether real property satisfies the requirements of section 421, it must be borne in mind that statutes exempting real property from taxation must be strictly construed, and that no exemption will be granted by any doubtful implication. In other words, the right to the exemption must be clearly established according to the statutory provision, and if a doubt exists, then that doubt should be resolved in favor of taxation (Lawrence-Smith School, Inc. v. City of New York, 280 N.Y. 805, 21 N.E.2d 693).

Whether an organization is organized exclusively for exempt purposes within the meaning of subdivision 1 of section 421 must be determined from the purposes recited in its certificate of incorporation and its bylaws.

A second requirement of section 421 is that the property must be used exclusively for the exempt purposes of the statute. Compliance with this requirement must in the final instance be a determination based on firsthand knowledge of the local assessors.

Compliance with the requirements of the statute concerning prohibitions against pecuniary profit can be shown by examination of the financial records of the school and language in the charter prohibiting such activities.

March 24, 1971