The NJ Tax Blog

On Monday, the New Jersey Supreme Court decided Hunterdon Medical Center v. Township of Readington. In a thirty-five page published opinion, the New Jersey Supreme Court affirmed a new test first put in place by Judge Kuskin of the Tax Court. The Supreme Court used this new test in order to discern whether the hospital at issue was in fact a “hospital” eligible for property tax exemption. In so doing, the New Jersey Supreme Court redefined the term “hospital” itself.

The New Jersey Supreme Court stated in part:

“In our view, the analysis for ‘hospital purposes’ must take into consideration the many medical pursuits permitted to the ‘modern’ hospital in New Jersey. A hospital can no longer be restrictively equated with a nineteenth, or even twentieth, century vision of a monolithic building, in which is offered continuous inpatient care or emergency treatment, twenty-four hours per day, to the sick, disabled, and infirm. Licensing authorities have allowed hospital activities to evolve as inpatient stays have diminished. Today, treatment often is delivered on an outpatient basis at a hospital’s main facility, as well as at off-site facilities, backed up by the promise of ready inpatient care from the general, acute-care hospital when necessary. Thus, a fair definition of core “hospital purposes” must acknowledge the variety of activities that a modern hospital can be expected to perform for patients, be they inpatients or outpatients. That said, a hospital’s expansive view of its mission does not necessarily equate with ‘hospital purposes’ in the tax exemption analysis.”

Ultimately, the Supreme Court affirmed the majority of the Tax Court’s and Appellate Division’s holdings, which affirmed the denial of the Hospital’s tax exemption application, and remanded the case back to the Tax Court for further fact-finding on one narrow issue. (The New Jersey Supreme Court remanded the case to the Tax Court for further fact-finding on the sole and precise issue as to whether the PT Service on the second floor of the hospital should be tax exempt.)

The full text of the New Jersey Supreme Court’s opinion may be found HERE.

On July 7, the Appellate Division affirmed the Tax Court of New Jersey's decision in Wee Love, Inc. v. Township of Maple Shade. In so doing, the Appellate Division agreed with the Tax Court that the day-care facility at issue in that case is a school for purposes of the local property tax exemption under N.J.S.A. 54:4-3.6. The Tax Court found, and the Appellate Division agreed, that due to the fact that virtually all of the plaintiff's building was used by preschool children, the predominant use of the building was as a school, even though at times some portion of the building was occupied by participants in before- and after-school programs. The Appellate Division also noted that there was substantial credible evidence to support the Tax Court's conclusion that the entire premise was exempt because the predominant use was as a school.

CNN reported today that a glitch in a Wells Fargo's computer system resulted in 900 taxpayers receiving a property tax bill for one penny. A video on CNN.com that discusses this mistake may be found HERE.

As released yesterday by the New Jersey Division of Taxation:

"The Division of Taxation is now in the process of mailing 2007 homestead rebate applications to homeowners who are under age 65 and who are not disabled. This is the second of two mailings for the program this year; applications were mailed in May to homeowners who were senior citizens (age 65 or older) or disabled.

The current mailing of application packets will be staggered over a two-week period starting July 3, 2008. The deadline for filing these applications is August 15, 2008.

Some senior and disabled homeowners may receive an application packet in this mailing, even though they have already filed for the 2007 homestead rebate. Homeowners who have already filed their applications online or by phone and received a confirmation number, or who have completed and mailed in a paper application, should not file again.

The homestead rebate application delivery dates by county are:

Morris, Ocean - July 3

Atlantic, Essex, Monmouth, Sussex - July 7

Camden, Hudson, Hunterdon, Salem, Somerset - July 10

Gloucester, Mercer, Middlesex, Passaic - July 12

Bergen, Burlington, Cumberland, Warren - July 16

Cape May, Union - July 18"

Click HERE for additional information on the 2007 homestead rebate.