For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None. The opinion of the court was delivered by Schettino, J.
The issue before us is whether the property of Princeton University Press (hereafter referred to as the Press) is tax exempt within the meaning of N.J.S.A. 54:4-3.6.
The Borough of Princeton assessed a tax for land, improvements and personalty for 1957. The Mercer County Board of Taxation denied petitioner's claim of exemption. This action was affirmed by the Division of Tax Appeals on the ground that the property of the Press was not used exclusively for the moral and mental improvement of men, women and children as required by the statute. The Press appealed and, while the matter was pending in the Appellate Division, we certified it.
An examination of the purposes, structure and activities of the Press is necessary for a disposition of the question. The Press was incorporated in 1910. The certificate specifically states that the Press is not incorporated for pecuniary profit and the corporation was formed under the laws applicable to non-profit organizations. R.S. 15:1-1. Its purposes as stated in its certificate have remained unchanged.
"The purposes for which this association is formed are, in the interests of Princeton University, to establish, maintain and operate a printing and publishing plant, for the promotion of education and scholarship, and to serve the University by manufacturing and distributing its publications."
The structure, activities and financial situation of the Press reveal the extent to which the association adheres to these purposes. The membership consists essentially of past, present and ex officio members of its Board of Trustees and the various committees of the Press. The main function of its membership is to elect the Board of Trustees, a policy-setting body. The Board itself consists of not more than fifteen individuals, nine of whom are trustees, alumni, or faculty members of Princeton University. It meets five times annually. Subordinate to the Board of Trustees are
the officers of the Press and various committees which outline Press policy in their respective fields. The Editorial Board, which determines whether material is publishable, is appointed by the President of the University and has five members all of whom must be on the University faculty. The Finance Committee, which provides financial management and supervision, has six members, four of whom are affiliated with the University.
The reason for this close relationship between the Press and the University is clear. As noted, the Press must act "in the interests of" the University and must "serve the University." Additionally, the deed which granted the Press its original land and building specifically provides for a reversion to the University if the Press ceases to act in or serve the University's interests.
The activities of the Press are diversified. A portion of its output consists of scholarly works selected, printed and distributed by the Press. The research for these works is not necessarily done at Princeton, nor need the author be affiliated with Princeton. The Press also publishes the "Princeton Alumni Weekly," which reports the activities of University alumni and plays a part in University fund-raising endeavors. The "Weekly" also contains informative articles on subjects of interest to alumni.
In contrast to its publishing endeavors, the Press engages in activity which can be classified as purely printing work. The Press engages in this printing operation to offset the losses incurred publishing scholarly works. The profit realized from the printing represents a form of subsidy to scholarly publishing. The printing includes work for Princeton University such as examinations, letterheads, billheads, football programs, pamphlets and catalogs.
The remaining printing is done for a variety of educational institutions, not affiliated with Princeton, and for other non-profit organizations. Among the educational institutions are Rutgers University, Stanford University, ...