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Passaic United Hebrew Burial Association v. City of Passaic

A-6207-97T2 and A-6209-97T2 and A-6210-97T2 (N.J. Super. App. Div. 2000) (Unpublished)

TAXATION—A property tax deduction is denied to a funeral home owned by religious organizations because its religious and charitable attributes were not exclusive to the property’s use.

A funeral home was operated by an organization whose members were religious organizations. In 1995, the Tax Court held that this funeral home’s property was not exempt from real property taxes for tax years 1993 and 1994 “because it was not used exclusively for religious purposes.” The opinion also stated that the funeral home did not seek exemption on charitable grounds. The decision was affirmed by the Appellate Division. The funeral home then sought exemption for the years 1995 and 1996 alleging that it operated for charitable purposes. The municipality countered that this claim was barred by the doctrines of collateral estoppel and entire controversy. The Appellate Division held that the elements of collateral estoppel were met in this case. In the earlier matter, the funeral home was not only unsuccessful in arguing that it operated exclusively for religious purposes but its attorney, when asked whether the ground for the exemption included the property’s use for charitable purposes, responded, “No. It’s religious. Unquestionably.” Consequently, the Court felt it fair to bar the funeral home’s charitable use claim because it had had a fair and reasonable opportunity to fully litigate that claim in the original action. Further, inasmuch as the activities “conducted at the subject property [had] not changed from 1910 to 1998 for an 88 year period,” there was no evidence that any intervening facts barred application of the collateral estoppel doctrine. Lastly, the Appellate Division believed that while there were both religious and charitable overtones to the funeral home’s use of its property, its main function was to provide a reasonably priced funeral and burial and that the religious and charitable aspects of its services were incidental to that main function. Consequently, its “religious and charitable attributes [were], therefore, not exclusive to the property’s use.”


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