A New Jersey state appeals court ruled that a building used in part as a training center for religious counseling did not qualify for a property tax exemption.
A state law exempts from taxation "buildings actually and exclusively used in the work of … corporations organized exclusively for the moral and mental improvement of men, women, and children, or for charitable purposes, provided … [the activities] are not conducted for profit."
The court, in rejecting the organization's claim that the property was used exclusively for nonprofit, charitable purposes, observed that "counselors charged fees that were only slightly lower than comparable rates for private psychologists." It concluded that "where there is what might be considered a duplication of a private practice or service, the applicant for a tax exemption has a duty to demonstrate that the circumstances, charges, and public betterment justify exemption and do not reflect merely private practices cloaked in charitable coverings."
Church Contribution Trust v. Mendham Borough, 541 A.2d 249 (N.J. App. 1988)