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Catholic Community Services, Inc. v. City of Newark

A-3478-04T2 (N.J. Super. App. Div. 2006) (Unpublished)

TAXATION; TAX EXEMPTIONS—The postal service is exempt from real property taxation because there is no distinction between “tax exempt” and “tax immune” in terms of what kind of entity qualifies.

A municipality appealed from a Tax Court judgment that granted a tax exemption for a property owned by a religious, charitable organization. Although it did not dispute that the property owner itself was a tax-exempt organization, it contended that the organization’s lease to the United States Postal Service destroyed what would otherwise have been a valid exemption. Specifically, it contended that “the Post Office, a federal agency immune from taxation, [was] not one of the specific exempt entities” enumerated in New Jersey’s real property tax exemption statute. The Tax Court noted that the property owner was already a tax-exempt organization and held that “the intent of the Legislature was to preserve the lessor organization’s exemption when they leased property to another non-taxpaying entity.” More specifically, the Tax Court determined that the statute’s use of the term, “tax exempt,” was intended by the Legislature to include “tax immune” organizations.

The Appellate Division agreed with the lower court and rejected the municipality’s assertion “that the terms ‘tax exempt’ and ‘tax immune’ [were] not interchangeable.”

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