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Wee Love, Inc. v. Township of Maple Shade

A-0290-07T2 (N.J. Super. App. Div. 2008) (Unpublished)

TAXATION; SCHOOLS — Where a daycare center provides early child education, and not just babysitting services, and its classroom activities contribute to the mental and physical development of the children who attend, it is entitled to an exemption from real estate taxes.

A child daycare center that was run by a non-profit corporation, acquired a building that had previously been used as a public school. The municipal tax assessor then added the building to the tax rolls. It previously had been exempt from property taxes because of its use as a school. The daycare center appealed to the Tax Court and the parties entered into a settlement in which the daycare center agreed to pay taxes for a previous year and to pay a significantly reduced amount for another year. The settlement also exempted the daycare center from paying taxes for the three prior calendar years.

Over the next three years, the daycare center made some tax payments and then stopped. The daycare center’s cessation of payments went unnoticed for ten years, at which point the tax assessor issued a notice for payment. The municipality sold a tax certificate on the property for the taxes due for the two most recent years. The daycare center sold a portion of its property to a developer and used the proceeds to redeem the tax certificate and to pay current taxes and for sewer and water charges which had been in arrears. The daycare center appealed the continued assessment to the county board of taxation on the grounds that it was a school and should be exempt from property taxes. The board found in favor of the municipality. On the daycare center’s further appeal of the assessment, the Tax Court found that the daycare center was a school for the purposes of property tax exemptions.

The municipality appealed further, but the Appellate Division agreed with the Tax Court that the daycare center qualified as a school and met the standard of providing the public benefit. This justified a tax exemption. It pointed to the Tax Court’s findings that the daycare center provided early childhood education, and not just babysitting services, and that the classroom activities contributed to the mental and physical development of the children who attended. The Court also deferred to the Tax Court’s finding that although portions of the school were used for non-educational, before and after school programs, the building’s predominant use was as a school and the entire premises were to be exempt from property taxes. The daycare center cross-appealed regarding the Tax Court’s refusal to hear its challenge of the assessments for one particular year. It found that the Tax Court did not have the jurisdiction to hear the daycare center’s challenge because the daycare center inadvertently failed to include that one particular year in its initial challenge before the county board. The Tax Court could not be the first venue for hearing the daycare center’s challenge. Based on its findings and conclusions, the Appellate Division affirmed the decisions by the Tax Court.


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