Skip to main content



Southern Jersey Family Medical Centers, Inc. v. City of Pleasantville

176 N.J. 184, 821 A.2d 1147 (2003)

TAXATION; EXEMPTION—An otherwise qualifying tax-exempt charity is not deprived of its right to a real estate tax exemption because the majority of its funding comes from governmental sources.

The Tax Court determined that a non-profit, community health care facility formed to provide health care to “the indigent” was not exclusively used for a tax-exempt charitable purpose and was required to pay property taxes. In order to be exempt from property taxes, an organization must satisfy a three-pronged test. It must be organized exclusively for a charitable purpose; it must be a non-profit entity; and the property must be actually and exclusively used for a tax-exempt purpose. The Tax Court found that the health care facility met two of the requirements, but determined that the property was not exclusively used for tax exempt purposes because the health care facility received government funding and received very few voluntary contributions. The Appellate Division reversed. It found that the facility’s use to provide health care to the poor qualified it as a charitable organization. The Court noted that the fact that the health care facility received government payment for the services it provided to the needy did not lessen the charitable nature of those services. The Supreme Court affirmed. “The receipt of government funds in return for services rendered to indigent or low-income patients does not impact on [the facility’] otherwise exclusive operation for charitable purposes.”


MEISLIK & MEISLIK
66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 • info@meislik.com