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Volume 1 - Opinions of Counsel SBEA No. 31

Opinions of Counsel index

Miscellaneous organizations (Granges) - Real Property Tax Law, § 421

Under ordinary circumstances a Grange organization is not entitled to a real property tax exemption since it is not organized exclusively, and it does not use its property exclusively, for one of the exempt purposes of section 421 of the Real Property Tax Law.

Our opinion has been requested as to the taxable status of real property owned by a Grange.

Section 300 of the Real Property Tax Law provides that “[a]ll real property within the state shall be subject to real property taxation, special ad valorem levies and special assessments unless exempt therefrom by law”. There is no statute which specifically exempts real property owned by a Grange, and, therefore, an exemption from real property taxation for such property would be granted pursuant to section 421 of the Real Property Tax Law, the requirements of which can be summarized as follows:

1. The real property must be owned by an organization which is organized exclusively for one or more of the purposes listed in section 421.

2. The real property must be used exclusively for carrying out one or more of the purposes listed in section 421. Any portion of the property which is not so used is subject to taxation.

3. No officer, member or employee of the organization may be entitled to receive any pecuniary profit from its operations, except reasonable compensation for services performed in furtherance of the corporate purposes.

4. No exemption shall be granted if the organization is a guise or pretense for directly or indirectly making any other pecuniary profit for such organization or for any of its members or employees.

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 a particular corporation is organized exclusively for exempt purposes within the meaning of the above statute must be determined from the purposes recited in its certificate of incorporation or charter and bylaws, if any, or the law under which it was incorporated.

Granges are not generally organized exclusively for the purposes stated in the statutory provision, and therefore, Grange property is not entitled to exemption under the statute.

March 28, 1972

NOTE:  Construes law prior to L.1978, c.616.