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Volume 3 - Opinions of Counsel SBEA No. 111

Opinions of Counsel index

Nonprofit organizations exemption (miscellaneous organization) (volunteer ambulance corporation) - Real Property Tax Law, § 421:

Real property owned by a volunteer ambulance corporation satisfying the requirements contained in section 421 of the Real Property Tax Law may be entitled to exemption under this section.

We have received an inquiry concerning the taxable status of a building constructed by a volunteer ambulance corps upon lands owned by a homeowners’ association. The facts are that the homeowners’ association has leased the lands to the ambulance corps for a term of 99 years; the cost of construction of the building was financed by contributions of town residents; the building is used to house ambulances and to conduct ambulance corps meetings; ambulance service is provided to town residents free of charge even in cases requiring transportation to distant locations and the ambulance corps does not receive revenue from the town on a contractual basis or otherwise.

Section 300 of the Real Property Tax Law provides, in part, that all real property within the State shall be subject to real property taxation unless exempt therefrom by law. There is no statute specifically exempting volunteer ambulance corporations from real property taxation. Since a statute was required to exempt property owned by volunteer fire companies (Real Property Tax Law, § 464) it would appear that similar legislation would be required to exempt property owned by a volunteer ambulance corporation. Bills to such effect have been introduced in several legislative sessions but have not been enacted into law.

However, it is possible for a volunteer ambulance corporation to be exempt from real property taxation pursuant to section 421 (i.e., § 420) of the Real Property Tax Law provided it is incorporated exclusively for one or more of the exempt purposes set forth in said section and provided further that the subject property is used exclusively for such purposes.

Of the purposes listed in said section, it appears that only charitable (subd. 1(a) ) and benevolent (subd. 1 (b)) could be applicable to a volunteer ambulance corporation.

Charity has been defined as a “. . . gift to be applied lawfully, among other things, for the benefit of an indefinite number of persons . . . relieving their bodies from disease or suffering” (In re Moore’s Estate, 66 Misc. 116, 122 N.Y.S. 828, 831). Also, in Taylor v. Hoag, (273 Pa. 194, 116 A. 826), it was called “. . . a gift for general public use for the benefit of an indefinite number of people for educational, religious, physical or social standpoint.” Similarly, benevolence is . the doing of a kind, helpful action toward another under no obligation except an ethical one . . .” (State v. Dunn, 134 N.C. 663, 46 S.E. 949).

It is to be noted that in each of these definitions, there is the element of voluntariness, of unexpected and unrequired generosity. The generosity required by these definitions goes beyond the further requirement that no profit be taken. It is this quality of generosity which separates the purposes of charity and benevolence from the other purposes enumerated in the statute, (e.g., hospital, educational, historical). For example, since the element of generosity is not required for educational purposes, it has consistently been held that a school which charges tuition to cover all of its expenses may be exempt, as long as no profit is taken. A corporation which seeks an exemption as charitable or benevolent, however, must satisfy the requirement of generosity.

In the case of Wantagh - Levittown Community Ambulance Corps v. Board of Assessors of Nassau County, 56 Misc. 2d 545, 289 N.Y.S.2d 330, a volunteer ambulance corporation was allowed an exemption under section 421. In that case, the ambulance service was provided free of charge. This organization was characterized by the court as “charitable” as apparently it did not furnish services on a contract basis.

It would appear, therefore, based upon the given facts, that the ambulance corps in question satisfies the use requirements of section 421 and is similar, in terms of its operation, to the Wantagh-Levittown Community Ambulance Corps, referred to above.

However, a problem arises in that the building is owned by the ambulance corps while the land on which the building stands is owned by a homeowners’ association. Quite clearly, the land in question is not entitled to the exemption provided for in section 421. Whether the building may be exempt depends on whether or not it is separately assessed for purposes of real property taxation. It is our opinion that, where there is separate ownership of the land and the improvements thereon, the law will tolerate separate assessments to their respective owners (21 Op.State Compt. 89). However, as we have stated “[w]here land and buildings are separately owned, an assessor may assess the buildings in the name of the landowner.” (1 Op.Counsel SBEA No. 95). This opinion is based on Doughty v. Loomis, 9 App.Div.2d 574, 189 N.Y.S.2d 413, aff’d, 8 N.Y.2d 722, 167 N.E.2d 643, 201 N.Y.S.2d 100, where the court held that the assessor could not be compelled to assess land separately to the landowners and a building separately to the building owner even though they had agreed that the lessees would pay the taxes on the building.

The assessor, therefore, has discretion in deciding how to list separately owned land and buildings on the assessment roll. If he chooses to separately assess the building owned by the ambulance corps (assuming the corps is organized exclusively for exempt purposes) then the property would appear to be exempt from real property taxation pursuant to section 421.

The only unresolved issue is whether or not the volunteer ambulance corps satisfies the statutory requirement that it be organized exclusively for exempt purposes. This may be resolved by examining its certificate of incorporation and by-laws. If uses other than exempt purposes are listed therein, then property of the ambulance corps would be taxable notwithstanding it satisfied all other requirements. Of course, this could be cured by amending the certificate of incorporation and the by-laws.

June 14, 1974