NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE TAX COURT

COMMITTEE OF OPINIONS

TAX COURT OF NEW JERSEY

 

 Olde Historic Courthouse

KATHI F. FIAMINGO 120 High Street

 JUDGE P.O. Box 6555

 Mount Holly, New Jersey 08060

 609 288-9500, Ext. 38303 Fax 609 288-9475

 

 

March 4, 2020

Jonathan M. Preziosi, Esq. 

Pepper Hamilton LLP 

301 Carnegie Center, Suite 400 

Princeton, New Jersey 08543 

Kathleen McGill Gaskill, Esq. 

712 East Main Street, Suite 2A 

P.O. Box 103 

Moorestown, New Jersey 08057 

Re: Friends Academy of Westampton v. 

 Township of Westampton 

 Docket No. 006096-2017 

Dear Counsel:

This letter constitutes the court’s opinion with respect to plaintiff’s motion for summary 

judgment and defendant’s cross-motion for summary judgment. For the reasons explained more 

fully below both motions are denied. 

I. Procedural History and Findings of Fact 

The court makes the following findings of fact based on the submissions of the parties as 

well as oral argument heard on October 22, 2019. The following facts are undisputed, unless noted 

otherwise.

Friends Academy of Westampton (“plaintiff”) is a New Jersey nonprofit corporation 

organized pursuant to the New Jersey Nonprofit Corporation Act, N.J.S.A. 15A:1-1 et seq. 
 

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Plaintiff operated a non-profit Quaker school for preschool and middle aged children, located on 

approximately 11 acres of property known as Block 201, Lot 6, on the Tax Map of the Township 

of Westampton (the “subject property”). The improvements consisted of a preschool building, 

middle school building, gym building with a multi-purpose room, and a main school building that 

housed a lower school, library and administrative offices. Plaintiff provided education to 

preschool and middle-school aged children at the subject property commencing in September 

2004. For the years it operated the school, plaintiff applied for and obtained an exemption from 

real property taxes under N.J.S.A. 54:4-3.6. 

By the 2015-2016 school year the Board decided to close the school due to decreased 

enrollment, increased operating expenses, and mounting debt of more than $1.8 million. Classes 

at the property ceased as of June 2016. After the Board elected to close the school, a Board member 

instituted suit seeking to enjoin the closing.1

 Pending disposition of the subject property, records 

of the school and its former students, furnishings and equipment, including all classroom furniture 

and furnishings, remained in place at the subject property. 

On August 20, 2016, defendant’s tax assessor notified all owners of tax exempt properties 

in the municipality of a “tax exemption audit” and requested that each such owner, including 

plaintiff, submit a “Further Statement” on or before November 1, 2016. Notwithstanding such 

request, plaintiff failed to submit a Further Statement with respect to the subject property. On 

February 6, 2017, defendant’s tax assessor notified plaintiff that its tax exemption was revoked 

due to the “failure to use and occupy the subject property for the intended purposes of the 

1 Plaintiff asserts that the lawsuit hampered its ability to successfully market and sell the subject 

property. Defendant disputes that a sale was hampered, noting that plaintiff listed the subject 

property for sale and entered into a contract for sale which did not include a contingency requiring 

the resolution of the lawsuit filed by the Board member. The subject property was sold to an 

unrelated third party in May 2017. 
 

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organization as of October 1, 2016 and . . . the failure to file the Further Statement by November 

1, 2016.” A Notice of Assessment was issued, assessing the subject property as follows for the 

2017 tax year: 

 Land: $2,039,900 

Improvement: $3,567,000 

 Total: $5,606,900 

On July 31, 2017, plaintiff filed a complaint appealing the denial of tax-exempt status for 

the 2017 tax year. Defendant filed an answer on April 6, 2017. On August 26, 2019, both parties 

filed motions for summary judgment. 

It is undisputed that there were no students enrolled and no classes taught during the year 

of 2017. Plaintiff contends that the subject property was being used for administrative offices, to 

assist students in transitioning to other schools by forwarding transcripts and other school-related 

records, and to assist displaced faculty and staff in obtaining new employment. In addition, 

plaintiff averred that the subject property was utilized to store and preserve school items and 

equipment, including desks, tables and chairs, audio-visual equipment and screens, computers, 

printers and server equipment, books and bookcases, phone and office equipment, the entire school 

library, classroom and laboratory equipment, globes, science atomic models, chalkboards and 

white boards, aquarium equipment, nurses office with scale and bed, gym mats and equipment, 

and other customary school equipment and supplies (hereinafter “school records, equipment, 

supplies, furniture and furnishings”). 

Defendant admits that the subject property was utilized for the storage of the school 

records, equipment, supplies, furniture, and furnishings. Defendant maintains that plaintiff’s 

answers to interrogatories did not assert that the subject property was being utilized for 

administrative offices or to assist students in transitioning to other schools or to assist displaced 
 

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faculty and staff. Thus, defendant disputes such uses and asserts additional discovery is required 

as to such alleged uses.

At oral argument, plaintiff further argued that notwithstanding defendant’s opposition

based on the disputed facts, the storage of the school records, equipment, supplies, furniture and 

furnishings by itself was sufficient to qualify the subject property as exempt from tax. Plaintiff 

requested that the motion move forward on its motion for summary judgment with respect to the 

admitted facts, that is, the storage of school records, equipment, furniture and furnishings only. 

Defendant did not object to proceeding on plaintiff’s motion for summary judgment with respect 

to those facts that were not in dispute and agreed that if the court found such uses were insufficient 

to support a finding in favor of plaintiff, that plaintiff preserved its right to argue that the alleged 

additional activities entitled it to exemption.

II. Legal Issues and Analysis 

A. Summary Judgment 

Summary judgment should be granted where “the pleadings, depositions, answers to 

interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine 

issue as to any material fact challenged and the moving party is entitled to a judgment or order as 

a matter of law.” R. 4:46-2(c). In Brill v. Guardian Life Ins. Co., 142 N.J. 520, 523 (1995), our 

Supreme Court established the standard for summary judgment as follows: 

[W]hen deciding a motion for summary judgment under Rule 4:46-

2, the determination whether there exists a genuine issue with 

respect to a material fact challenged requires the motion judge to 

consider whether the competent evidential materials presented, 

when viewed in the light most favorable to the non-moving party in 

consideration of the applicable evidentiary standard, are sufficient 

to permit a rational factfinder to resolve the alleged disputed issue 

in favor of the non-moving party. 

 

 [Id. at 523.] 
 

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“The express import of the Brill decision was to ‘encourage trial courts not to refrain from granting 

summary judgment when the proper circumstances present themselves.’” Twp. of Howell v. 

Monmouth Cty. Bd. of Taxation, 18 N.J. Tax 149, 153 (Tax 1999) (quoting Brill, 142 N.J. at 541).

[T]he determination [of] whether there exists a genuine issue with 

respect to a material fact challenged requires the motion judge to 

consider whether the competent evidential materials presented, 

when viewed in the light most favorable to the non-moving party in 

consideration of the applicable evidentiary standard, are sufficient 

to permit a rational factfinder to resolve the alleged disputed issue 

in favor of the non-moving party. 

[Ibid. (quoting Brill, 142 N.J. at 523.] 

The movant bears the “burden to exclude any reasonable doubt as to the existence of any genuine 

issue of material fact” regarding the claims asserted. Judson v. Peoples Bank and Trust Co., 17 

N.J. 520, 529 (1954) (citation omitted). 

As noted, plaintiff’s alleged use of the subject property for the purposes of assisting 

students and staff in their search for new schools and employment, respectively, is in dispute. The 

parties do not dispute that the subject property was utilized for the storage of school records, 

equipment, supplies, furniture and furnishings. Plaintiff maintains that such storage qualifies the 

subject property for exemption. Defendant disagrees. At the request of the parties this motion is 

decided only as to the undisputed facts of the storage of school records, equipment, furniture, and 

furnishings. 

B. Property Tax Exemption 

An exemption from taxation is a departure from the equitable principle that everyone 

should bear their just and equal share of the public burden of taxation. Princeton Univ. Press v. 

Princeton, 35 N.J. 209, 214 (1961); Princeton Twp. v. Tenacre Foundation, 69 N.J. Super. 559, 

563 (App. Div. 1961). Taxation is the rule and exemption is the exception to the rule. Princeton 
 

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Univ. Press, 35 N.J. at 215. This rule reflects the well-established policy that “the public tax 

burden is to be borne fairly and equitably.” Int’l Schools Servs. v. West Windsor Twp., 207 N.J.

3, 15 (2011). For that reason, an entity seeking a tax exemption has the burden of showing its 

entitlement to the exemption. Ibid. The legislative design to release one from his just proportion 

of the public burden should be expressed in clear and unequivocal terms. Bd. of Nat’l Missions, 

etc. v. Neeld, 9 N.J. 349, 353 (1952). Thus, the burden is upon the claimant to clearly bring himself 

within an exemption provision. Ibid. 

In this matter, to establish its right to a property tax exemption, plaintiff must satisfy the 

requirements of N.J.S.A. 54:4-3.6, which provides an exemption for 

[A]ll buildings actually used for colleges, schools, academies or 

seminaries, provided that if any portion of such buildings are leased 

to profit-making organizations or otherwise used for purposes which 

are not themselves exempt from taxation, said portion shall be 

subject to taxation and the remaining portion only shall be exempt; 

. . . the land whereon any of the buildings hereinbefore mentioned 

are erected, and which may be necessary for the fair enjoyment 

thereof, and which is devoted to the purposes above mentioned and 

to no other purpose and does not exceed five acres in extent; the 

furniture and personal property in said buildings if used in and 

devoted to the purposes above mentioned; . . . provided, in case of 

all the foregoing, the buildings, or the lands on which they stand, or 

the associations, corporations or institutions using and occupying 

them as aforesaid, are not conducted for profit. 

[N.J.S.A. 54:4-3.6.] 

The Supreme Court of New Jersey has interpreted the statute as requiring that the 

organization requesting exemption satisfy the following three-prong test: (1) it is organized 

exclusively for a charitable purpose (the “organization test”); (2) its property is actually used for 

such a charitable purpose (the “use test”); and (3) its use and operation of the property is not for 

profit (the “profit test”). Advance Housing, Inc. v. Teaneck Twp., 215 N.J. 549, 567-568 (2013); 
 

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see also Paper Mill Playhouse v. Millburn Twp., 95 N.J. 503, 506 (1984) (applying analogous 

three-pronged test to “moral and mental improvement” exemption of N.J.S.A. 54:4-3.6). 

It is well-settled that property is assessable or exempt with reference only to its ownership 

and use on October 1 of the pretax year. Atlantic Cty. New School, Inc. v. City of Pleasantville, 

2 N.J. Tax 192, 197 (1981); Emanuel Missionary Baptist Church v. City of Newark, 1 N.J. Tax 

264, 266 (1980); Jabert Operating Corp. v. Newark, 16 N.J. Super. 505 (App. Div. 1951) (“it must 

be noted that the taxable or nontaxable status of property in this State relates to October 1 of the 

pretax year since it is the use of property on that date which determines whether the property is or 

is not exempt for the tax year”). In the present matter the parties do not dispute that plaintiff 

satisfied the organization test and the profit test. Where the parties disagree is whether the property 

was “actually used” for charitable purposes as of October 1, 2016. 

It is “the use of the property, not the status or character of its owner” that is key in the

exemption determination. Emanuel Missionary Baptist Church, 1 N.J. Tax at 268. “When 

determining whether a property is actually used for a tax-exempt purpose, the Tax Court evaluates 

whether the property is ‘reasonably necessary’ for such tax-exempt purposes.” Bor. of Hamburg 

v. Trs. Of the Presbytery of Newton, 28 N.J. Tax 311,318 (Tax 2015). “When applying this test, 

the Court has held that ‘necessary’ is not interpreted to mean ‘absolutely indispensable’” Id. 318-

319 (citing Boys’ Club of Clifton, Inc. v. Twp. of Jefferson, 72 N.J. 389, 401 (1977). 

The parties agree that as of October 1, 2016, the subject property was no longer being 

utilized to conduct classes and that all of the school records, equipment, furniture and furnishings 

remained on site. Plaintiff argues that such storage use was reasonably necessary for its tax-exempt 

purpose, such that it is entitled to the statutory exemption from taxation. 
 

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Initially, plaintiff likens its use of the subject property to that of the plaintiff in Presbytery. 

There religious services were no longer conducted at the church property, but the building housed 

“artefacts, including the pulpit, organ, baptismal font, Bibles, church bell, religious garments, and 

hymnals.” Id. at 316. Additionally, the plaintiff in Presbytery worked with another charitable 

foundation, the Foundation for Peace, which stored goods at the subject property to be used in 

charitable mission work. The court found that the use of the church property to store “a substantial 

quantity of religious artefacts” for which no reasonable storage alternative was available and “the 

use of the Church to store goods in connection with the [other charitable organization] [was] a

valid charitable purpose that advance[d] the religious mission of the Presbytery.” Id. at 323. 

Plaintiff asserts that, similarly to the plaintiff in Presbytery, its storage of the school 

furniture, furniture, equipment and records is a valid charitable purpose which advances its mission 

as an exempt organization. Plaintiff does not provide any factual basis for its conclusion that the 

storage of the school records, equipment, furniture and furnishings constitutes an exempt use. 

Instead, plaintiff urges that the finding in Presbytery should be applied without further 

investigation. As noted above, the court in Presbytery did not conclude that the mere storage of 

personal property owned by the exempt organization constitutes a qualifying use, in and of itself. 

The court found, from the evidence presented to it, that “the Church . . . [was] an ‘integral part of 

the operations of the active parishes’ and therefore ‘reasonably necessary’ for the Presbytery’s 

religious purpose.” Ibid. (citing Roman Catholic Archdiocese of Newark v. East Orange City, 18 

N.J. Tax 649, 654 (App. Div. 2000)). The court was further persuaded by the use of the church 

building to store goods belonging to the Foundation for Peace to be used in charitable mission 

work in South America. Id. at 316. The court found that this use of the church property was “a 

valid charitable purpose that advances the religious mission of the Presbytery.” Id. at 323. 
 

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Plaintiff presents no similar evidence to demonstrate how the storage of the school records, 

equipment, furniture and furnishings advances plaintiff’s mission as a school.

2

 The court does 

not read Presbytery as approval for the mere storage of the exempt organization’s assets as an 

exempt purpose in and of itself. An exempt organization must satisfy the requirements of the

statute granting the exemption and must demonstrate how the storage furthers the exempt purpose 

of the organization. See Hamburg, 28 N.J. Tax at 318. Nothing provided by plaintiff demonstrates 

how the storage of assets of a now non-functioning school is integral to the operation of the school 

or was reasonably necessary for the conduct of the school or was “integral” to its charitable 

purpose. 

Plaintiff argues that the storage of the school’s property on the subject property was in 

furtherance of its charitable mission in that the “orderly dissolution and disposition of assets . . . 

are, by definition, necessary and integral to the charitable purpose of a non-profit corporation.” 

Furthermore, plaintiff contends that it was required to maintain the property essential to the 

operation of a school by virtue of the lawsuit by one of its Board members which may have resulted 

in the requirement that the school reopen and teach classes. With respect to the latter argument, 

the defendant asserts that the contract under which the plaintiff sold the subject property did not 

include any contingency for the successful resolution of the lawsuit. However, it appears that 

plaintiff disputes that contention and neither plaintiff nor defendant has provided a copy of the 

contract for sale. Thus, the court finds that this fact is in dispute and will not rely upon it. 

Plaintiff’s argument that one of the requirements of a charitable organization is that it 

dispose of its assets in a qualifying manner, and thus constitutes an exempt purpose, has superficial 

2 Plaintiff’s assertion that, in addition to being an “educational institution” it is also a “religious 

organization” and the facts underlying that assertion were not part of the statement of material

facts upon which its motion was based. As a result, the court will not address such a contention. 
 

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appeal. Here, plaintiff argues that as long as it maintained the assets for disposition and ultimate 

sale, it was achieving a charitable goal. On closer inspection however, plaintiff’s argument fails 

under its own weight. Brought to its logical conclusion, plaintiff’s argument would elevate the 

mere storage of an exempt organization assets as an exempt use in and of itself. Nothing within 

the statute granting exemption permits such an interpretation. The provision of N.J.S.A. 54:4-3.3 

under which plaintiff claims relief specifically provides that the buildings for which exemption is 

claimed be “actually used for . . . schools.” Utilizing a building for the storage of items used in 

the conduct of a school is substantially different from actually using the building for a school.

To hold otherwise would unnecessarily and improperly expand the role and purpose of 

exemptions and pervert the basis for which exemptions are granted. “The underlying rationale for 

the exemptions is as a ‘quid pro quo for the performance of a service essentially public, and which 

the state thereby is relieved pro tanto from the necessity of performing . . . .’” Jersey Shore Med. 

Ctr. v. Neptune Twp., 14 N.J. Tax 49, 56 (1994) (quoting Carteret Academy v. State Bd. of Taxes, 

102 N.J.L. 525, 528 (Sup. Ct. 1926), aff'd, 104 N.J.L. 165 (E. & A. 1927)). The mere storage of 

records or assets previously used, or to be used in the future, for the conduct of a school provides

no public service or benefit to the state such that exemption is appropriate. 

Plaintiff also cites Hackensack City v. Bergen Cty., 405 N.J. Super 235 (App. Div. 2009). 

There the County of Bergen owned real property which, prior to 1997, was utilized for county 

government purposes. In tax years 1997 and 1998, the use of the property was changed to storage 

of county equipment, furnishings, records and filed. The parking lot was used by various civic 

and non-profit organizations. Id. at 240-41. The taxing authority argued that the property was no 

longer “used for public purposes” as required by the applicable statute, N.J.S.A. 54:4-3.3. The 

appellate court affirmed the finding of the Tax Court that the usage of the property for the storage 
 

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of county owned property met the public use requirement for the purposes of the exemption statute

applicable to governmental entities. 

The exemption provided by N.J.S.A. 54:4-3.3 is not at issue here. Plaintiff’s entitlement 

to exemption is determined under N.J.S.A. 54:4-3.6. There is a significant distinction between the 

two provisions. As noted by our Supreme Court, “[t]ax exemptions in favor of nongovernmental 

owners are strictly construed in the sense that an exemption will not be extended beyond the 

ascertainable intention of the Legislature. On the other hand, it has been held that exemptions in 

favor of governmental agencies should be liberally construed.” Walter Reade, Inc. v. Dennis, 36 

N.J. 435, 440 (1962) (internal citations omitted). Plaintiff is a nongovernmental owner. Plaintiff’s 

entitlement to exemption is constrained by the requirement that the building be “actually used” for 

a school. As the court has explained above, the mere storage of materials in anticipation of a sale 

is not within the purview of “charitable use” as intended by the Legislature in the exemption statute 

applicable to plaintiff, N.J.S.A. 54:4-3.6. 

III. Conclusion 

For the reasons set forth above plaintiff’s motion for summary judgment is denied. As 

noted above due to the genuine issues of material fact present in this matter, defendant’s motion 

for summary judgment is also denied. 

Very truly yours, 

 

 Kathi F. Fiamingo, J.T.C.