Vernoia, Enterline + Brewer, CPA LLC

Big brother taking care of disabled little boy in wheelchairProperty owned by a nonprofit organization and used as a retreat by children with life-threatening illnesses and their families qualified for a charitable purposes exemption from New Jersey property tax. Pursuant to N.J.S.A. 54:4-3.6, exempt property must be organized exclusively for the moral and mental improvement of men, women, and children. According to the taxpayer’s bylaws, the organization’s purpose was to establish moral and financial support to help the needy, disabled, and terminally ill and their families with no regard to race or religion, which was consistent with the “moral and mental improvement” provision under the statute. The taxpayer also met several factors enumerated in case law. It did not engage in a commercial enterprise because it did not accept any money from individuals using the property; the property was used in a manner to further the taxpayer’s charitable purpose of providing support for seriously ill children and their families; and the use of the property as a retreat assisted siblings and parents of children with life-threatening illnesses in coping with family grief. Lastly, the use of the property to help children with life-threatening illnesses and their families furthered the important governmental concern of fostering the family unit. To qualify for the exemption under the statute, the property also had to be reasonably necessary to effectuate the taxpayer’s beneficent purpose. The taxpayer demonstrated a clear need for the use of the property as a retreat for parents and siblings of children with life-threatening illnesses. Therefore, the retreat’s location, premise and property were reasonably necessary to provide distressed families with support.

Chai Lifeline, Inc. v. Township of Mahwah, New Jersey Tax Court, Nos. 010009-2008; 017491-2011, June 18, 2014

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