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Country Club’s Exemption Claim Lands In The Rough

by: Richard De Angelis
21 Feb 2014

A Tax Court judge has rejected a claim by Sakima Country Club for a real property tax exemption under N.J.S.A. 54:4-3.6. 

Sakima Country Club is a private club located in Carney’s Point Township.  Sakima was originally incorporated in 1931 as the Dupont Penns-Grove Country Club, a non-profit entity.   Sakima’s organizational documents explicitly provide that the taxpayer is dedicated to the welfare and pleasure of its members.  The record reflects, although with what the court described as a “decided lack of precision,” that Sakima allows its facilities to be used free of charge by a local highs school, volunteer fire department and other organizations.  The Tax Court found that the mere fact that Sakima engages in charitable acts does not transform the organization into one dedicated exclusively to the moral and mental improvement of men, women, and children.

Under the statute, a property qualifies for an exemption if it is owned by a non-profit entity and is actually used in the work of that entity.  The court, relying on the three prong test established by the Supreme Court in Paper Mill Playhouse v. Township of Millburn, 95 N.J. 503, 507 (1984) concluded that the Sakima property does not satisfy the statutory criteria for exemption.   Under Paper Mill Playhouse,  the entity claiming an exemption must demonstrate that: (1) it is organized exclusively for the moral and mental improvement of men, women and children; (2) the subject property must be actually be used for the tax exempt purpose; and (3) the operation and use of the property must not be conducted for profit.

A copy of the court’s decision in Sakima Country Club v. Township of Carney’s Point may be found here.