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Volume 4 - Opinions of Counsel SBEA No. 92

Opinions of Counsel index

Nonprofit organizations exemption (religious) (educational) (summer camp) - Real Property Tax Law, § 421:

A summer camp owned by a Jewish congregation which is exclusively used for religious and educational purposes will be exempt from taxation pursuant to section 421 assuming the other requirements of the statute are satisfied and the recreational use of the property continues to be incidental to the camp’s exempt purposes.

We have received an inquiry concerning the taxable status of property owned by an incorporated Nassau County Jewish congregation and located in Sullivan County.

In New York State, an exemption from taxation on real property owned by certain nonprofit corporations and associations is provided for in section 421 of the Real Property Tax Law. In order to be entitled to this exemption the real property must be owned by a corporation or association organized exclusively for one or more of the exempt purposes specified in the statute, and the real property must be used exclusively for one or more such purposes, with any portion of the property not so used being subject to taxation. In addition, 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 corporate purposes.

The first two requirements of this statute appear to be met in this case; i.e., the property is owned by the corporation in question, and this corporation is “organized exclusively” for one or more of the exempt purposes enumerated in the statute (religious and educational). The purposes for which this congregation was formed are set forth in paragraph 8 of its certificate of incorporation which reads as follows:

8. The principal purpose of the congregation shall be the teaching and practice of Judaism according to the ways of the Old Testament and the Wisdom of the Prophets in a Traditional and Conservative tradition consistent with the democratic traditions of the United States of America; to establish a house of worship, schools, youth programs and educational programs to implement and disseminate the same.

Thus, assuming no officer, member or employee of the society is entitled to receive any pecuniary profit from its operation aside from reasonable compensation for services performed in furtherance of corporate purposes, the final requirement of the statute which must be met is that the property be “used exclusively” for the exempt purpose(s). An opinion as to this requirement is rendered difficult because each case must necessarily be decided on its own merits. The local assessor must investigate the actual use of the property and satisfy himself that the property is being used exclusively for the exempt purposes. However, some general guidelines exist as to the meaning of the phrase “used exclusively” in this statute.

The courts in this State have held that property is so used when it is used in the furtherance of the exempt purposes so as to constitute an integral or coordinate part in carrying out the overall corporate purposes. It must be made to appear that the use and need of the property by the corporation or institution “is necessary or fairly incidental to the maintenance of the institution for the carrying out of the purpose for which it was organized.” People ex rel. Blackburn v. Barton, 63 App. Div. 581, 583, 71 N.Y.S. 933, 935 (see also, People ex rel. Academy of the Sacred Heart v. Commissioner of Taxes and Assessments, 6 Hun 109, aff’d, 64 N.Y. 656; St. Luke’s Hospital v. Boyland, 12 N.Y.2d 135, 187 N.E.2d 769, 237 N.Y.S.2d 108).

If only a portion of the property is used exclusively for carrying out the exempt purposes, then the property is exempt only to the extent of the value of the portion so used, and the remaining portion is taxable (§ 421(2)).

The attorney for the corporation has stated that the property will be used “. . . as a nonprofit Summer Camp for blood and marriage related children of members of the Congregation”. Apparently attendance at regularly scheduled morning and evening religious services is mandatory for all members; in addition, at least one-half of each day is devoted to the study of religion and to religious service participation. He also indicates that recreational facilities are available and that use of such facilities will be encouraged. Apparently the property will not be available to the general public, although he also states that “a limited number” of underprivileged children will be given the opportunity of attending the camp.

The use of the property as reflected in the facts given to us by the attorney appears to make this property eligible for exemption from real property taxation, in accordance with the determination in the case of Greater New York Corp. of Seventh-Day Adventists v. Town of Dover, 29 App. Div.2d 861, 288 N.Y.S.2d 334, appeal dismissed, 23 N.Y.2d 682, 243 N.E.2d 150, 295 N.Y.S.2d 932. The property in that case, consisting of a cafeteria, cabins, farmhouse, tennis courts, lake frontage, a golf course and pool, was maintained primarily as a spiritual retreat for members of a particular sect, and not open to the general public, was held to be exempt. Thus, the mere existence and use of facilities for physical education and general recreation does not work to disqualify a religious campsite from tax exemption under section 421 (see also, People ex rel. Watchtower Bible & Tract Soc. v. Haring, 8 N.Y.2d 350, 170 N.E.2d 677, 20 N.Y.S.2d 673, mot. for rearg. den., 9 N.Y.2d 688, 173 N.E.2d 246, 212 N.Y.S.2d 1025; 1 Op.Counsel SBEA No. 22). It is our opinion that, assuming the property is actually used as the attorney has suggested it will be, this property would be entitled to the exemption from real property taxation, provided for in section 421.

February 21, 1975