| |
Christopher John Stracco, Esq.*
In its recent decision in The Roman Catholic Archdiocese of Newark
v. City of East Orange, the New Jersey Tax Court affirmed the property
tax exemption on two Roman Catholic churches.(1) The most significant
aspect of the decision was the Tax Court’s rejection of the
government’s contention that the Court must examine the nature,
level, amount or quantum of religious use of otherwise qualified
property in order to sustain the requested property tax exemption.
The government of the City of East Orange challenged the property
tax exemptions of two Roman Catholic Churches on two grounds: that
the properties were insufficiently used for religious worship or
religious purposes, and that the alleged minimal amount of religious
use militated against the tax exemption of the properties. The Archdiocese
argued that an examination by the court of the nature, level, amount
or quantum of religious use would constitute an impermissible intrusion
into the religious activities of the Roman Catholic Church, and
thus would violate the Church’s First Amendment protections
under the Constitution of the United States and similar protections
under Article I, ¶¶ 3 and 4, of the New Jersey Constitution.
During the relevant tax years the Archdiocese offered weekly mass
at the two churches in question, although the Church conceded that
usually no more than two persons were present at each mass —
the pastor and the security guard for the church, who was a church
employee. The doors to the churches were unlocked at the times of
Masses, but the Masses were not publicized and there was no advance
notice to the public. The church buildings were also used as repositories
for church records, artifacts, and furniture; occasional church
meetings also were held at the sites. Also, at one of the sites
the parish gymnasium was occasionally used by a Catholic youth athletic
organization for practices and team meetings.
In its decision the court initially set out the three-tier test
for qualification for a property tax exemption under New Jersey
tax law:
- The organization claiming the exemption for the property must
be organized exclusively for the exempt purpose;
- The property must actually and exclusively be used for the exempt
purpose; and the owner entity must not operate or use its property
for profit.(2)
The court noted that the government did not challenge the Archdiocese’s
qualifications as a religious corporation that was organized exclusively
for religious purposes, nor did the City contest that the properties
in question operate in a not-for- profit manner. The City’s
claim was that the level of religious activity taking place at the
property was insufficient to justify the tax exemption. Although
it is not specifically stated in the Court’s opinion, it can
be inferred by an observant reader that the purpose of the Masses
was called into question by the government.(3)
The Tax Court noted that the courts in New Jersey had never addressed
the issue of whether a minimum level of activity is required to
obtain a tax exemption for property used for religious worship or
religious purposes. The Tax Court then reviewed cases from other
jurisdictions and concluded that, almost universally, other states
had rejected a "quantum of use" test in determining the
tax exempt status of property utilized for religious purposes.(4)
The Tax Court concluded that the courts in other states steer clear
of any First Amendment conflicts that might arise from restrictive
interpretations of tax exemption statutes as they pertain to religious
organizations, and instead offer flexible and reasonable interpretations
that minimize the burden on religious organizations to obtain exemptions
for religious use of their property.(5)
The Tax Court noted that the New Jersey exemption statute "only
requires actual and exclusive use and does not impose a de minimis
test on entitlement to religious worship or religious purposes exemptions."(6)
The Court found that the New Jersey statute was consistent with
the favorable treatment of religious institutions in New Jersey
which are protected by three separate provisions of the New Jersey
Constitution, one of which specifically requires the granting of
exemptions from taxation for property exclusively used for religious
purposes.(7) In upholding the tax exemptions on the properties in
question, the Tax Court held as follows:
To measure the quantum of religious use of a completed building
as a condition of granting a tax exemption would engage the courts
in an improper evaluation of religious practice....once [a property
is] occupied and used...the failure to grant exemptions would be
inappropriate.
Religious institutions are entitled to the exemption...if they
demonstrate that the property is actually used for a religious purpose,
and that the amount of use in this case, although minimal, is sufficient
to sustain the exemption. Once it has been proven that the religious
activities are conducted on the property, the taxpayer has met its
prima facie case on that issue, and then must prove only that such
exempt use is exclusive to establish entitlement to the exemption.(8)
With regard to whether religious activities were conducted on the
property, the Tax Court found that the two properties in question
were used for religious worship purposes, Catholic Mass was held
weekly during the three tax years in dispute, occasional religious
meetings took place at the sites, and Catholic youth athletic practices
and meetings also took place at one of the properties. The Court
concluded that the fact that no one except the parish priest and
a parish employee attended mass was irrelevant, as was any motive
or purpose of the Masses because Mass services were part of the
spiritual practice of the Roman Catholic Church. Therefore, the
tax exemptions on the properties were upheld by the Court.
The lesson of this case is significant. The Tax Court of New Jersey
did not succumb to the arguments of the City with respect to an
examination of the nature, level, amount or quantum of the religious
use involved for purposes of granting the tax exemption. The Court
could very easily have done this. The result would have been an
unnecessary, unwarranted, and as the New Jersey Court recognized,
an unconstitutional, intrusion by the government into religious
practices. Such a result would have instituted a new standard whereby
tax exemptions were conditioned upon what the government and the
courts believe constitute an appropriate nature, level, amount or
quantum of religious use.
*Christopher John Stracco is a partner in Morristown, New Jersey’s
Pitney, Hardin, Kipp & Szuch specializing in taxation litigation
and appeals.
- Roman Catholic Archdiocese of Newark v. City
of Newark, Docket No. 000392-95, et seq., (Tax Ct. May 27, 1998),
approved for publication in volume 16 of the New Jersey Tax Court
Reports.
- Id., Slip Op., p. 5, citing Paper Mill Playhouse
v. Millburn Township, 95 N.J. 503, 506 (1984).
- See Slip Op., p. 3 ("...it is not so
clear as to the purpose of the Masses") and p. 15 ("...any
motive or purpose of such Masses [is irrelevant]").
- See Institute in Basic Life Principles, Inc.
v. Watersmeet Township, 551 N.W. 2d 199 (Mich. Ct. App. 1996);
General Conference of the Church of God 7th Day v. Carper, 558
P.2d 832 (Colo. 1976); Congregation Emanu-el of the City of New
York v. City of New York, 270 N.Y.S. 6, 9 (N.Y. Sup. Ct. 1934);
Corporation of the Episcopal Church in Utah v. Utah State Tax
Commission, 919 P.2d 556 (Utah 1996).
- Slip Op., p. 13.
- Id. citing N.J.S.A. 54:4-3.6.
- See N.J. Const. Art. I, ¶¶ 3, 4;
Art. VIII, § 1, ¶ 2.
- Slip Op., pp. 14-15.
Texts
Passion is not a main concern of Scripture, which
has mightier tales to tell. But when flares of passion ignite major
events, the Bible pictures these flares in swift sure strokes, sparing
no details out of delicacy. . .
The prophets uses sexual jealousy, revulsion, and rage as figures
in a grand and terrible argument, the fall of a great people and
the coming of a Redeemer.
Herman Wouk, This is My God
|
