Property Tax Exemption Denied to West Windsor Non-Profit

by: Anthony F. Della Pelle
5 Aug 2011

The New Jersey Supreme Court, reviewing multiple decisions by the Appellate Division and the Tax Court, held that West Windsor Township properly denied an exemption application from International Schools Services, Inc., (“ISS”) because the non-profit activities on its property were commingled with the for-profit ventures with which it had a “significant” and “substantial” involvement. That involvement included the creation of Independent Schools Group, Inc., (“ISG”) and ISS Financial and Insurance Network, Inc. (“ISSFIN”), providing these entities with professional services that were not “charged back,” below-market rents, unsecured loans that were not timely repaid, operating out of the same building as ISS, and shared officers and staff.

The Court reiterated that the burden is on the claimant to establish the right to the exemption. The Court also placed the burden on the claimant to “conduct its affairs in such a fashion as to allow local taxing authorities to readily determine its eligibility for exemption.” The Court found ISS failed to meet the burden, and it “was the taxpayer entity itself that constructed this quagmire of entanglement. . . .” Thus, the Court held the Appellate Division properly affirmed the denial of ISS’s claim for the 2002 and 2003 tax years.

A copy of the New Jersey Supreme Court’s opinion in International Schools Services, Inc., v. West Windsor Township, A-114 (July 6, 2011), can be found here.

For news coverage on this story, please see the following article from the Trenton Times by Lisa Coryell:

Court orders non-profit to pay taxes on Princeton properties

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.