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Roman Catholic Archdiocese of Newark v. City of East Orange

18 N.J. Tax 649 (App. Div. 2000)

TAXATION; CHURCHES—Storage of religious artifacts and records, holding meetings of priests, and sponsoring basketball games were found to be an integral part of the operation of a church and qualified its real property for exemption from taxation.

A municipality argued that two closed parishes were no longer subject to exemption from real estate taxes. The church argued that the two parishes were used in conjunction with the operation of three other parishes. The rectory in one of the parishes was used for some deanery meetings and the gymnasium at the other parish was used for a basketball program. Both churches were also used for the storage of church records, such as baptismal records, and a substantial quantity of religious artifacts, including stained glass windows, altars, pews, holy water fonts, processional candles, and religious statues. Upholding the church’s tax exemption claim, the Tax Court relied primarily on the fact that weekly masses were conducted in the closed parish churches. The Tax Court conceived that the critical issue in the case was “whether a minimum level of activity is required to obtain a tax exemption for property used for religious worship or religious purpose.” In that regard, the Tax Court did not want to measure the quantum of religious use so that it would not engage in an improper evaluation of religious practice. The municipality was not satisfied with the ruling of the Tax Court, and appealed. The Appellate Division looked to the applicable statute and found that for an exemption, the applicant must show that “(1) it is organized exclusively for a tax exempt purpose; (2) its property is ‘actually and exclusively’ used for the tax exempt purpose; and (3) its operation and use of its property is not conducted for profit.” The only issue presented in the appeal was whether the properties in question were actually and exclusively used for religious purposes during the years in question. “The test for determining whether a property is actually and exclusively used for a tax exempt purpose is whether the property is ‘reasonably necessary’ for such [tax exempt] purposes.” In that regard, the Appellate Division concluded that the use of the church properties for the storage of religious artifacts and records, meetings of priests from different parishes, and basketball was an integral part of the operation of the active parishes and thus “reasonably necessary” for the church’s religious purposes. Moreover, in the mind of the Court, these religious uses of the properties were not merely de minimis. On that set of circumstances alone, the Court was satisfied that the churches continued to be actually and exclusively used for religious purposes. Consequently, the Court perceived “no need in this case to decide whether religious worship services are conducted in a manner that is not reasonably calculated to attract attendance by members of the public” because, in the Court’s mind, these properties were already being used for other religious purposes.


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