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Chester Theatre Group of Black River Playhouse v. Borough of Chester

Decided: July 6, 1971.

THE CHESTER THEATRE GROUP OF THE BLACK RIVER PLAYHOUSE, A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT,
v.
THE BOROUGH OF CHESTER, DEFENDANT-RESPONDENT, AND STATE OF NEW JERSEY, DIVISION OF TAX APPEALS, DEPARTMENT OF TREASURY, RESPONDENT



Conford, Kolovsky and Carton. The opinion of the court was delivered by Carton, J.A.D.

Carton

The Chester Theatre Group of the Black River Playhouse (Group) appeals from an order of the Division of Tax Appeals (Division) affirming the denial by the Morris County Board of Taxation of a real property exemption under N.J.S.A. 54:4-3.6.

The Group is a New Jersey nonprofit corporation organized "to stimulate, perpetuate and develop interest in the dramatic arts and to educate the general public in the arts." Its charter provides that no part of any income shall inure

to the benefit of any private shareholder, member or individual. Upon dissolution the assets of the corporation are to be distributed only to such organizations whose purposes are similar and which enjoy exemption from federal income tax.

Parenthetically, we note that the Group has been exempted from both the New Jersey state sales tax and from federal income tax as an educational institution.

The Groups owns what is commonly called the Chester Theatre (Block 13, Lot 1), situated at the corner of Grove and Maple Streets in the Borough of Chester. For tax purposes the municipality assessed the property at $4200 in 1966 and $3575 in 1967.

The theatre property was acquired by the Group in May 1966 and has been used exclusively for drama workshops, plays, displays of art and productions of music since that time. All activities*fn1 have been conducted on a nonprofit basis. Membership in the Group is open, but one need not be a member to participate in the Group's activities. And, although an admission price of about $2 is normally charged for performances, that fee is "just enough to support [the Group's] function." The Theatre seats about 125 persons. None of the performers receives any compensation.

The music and drama activities offered in the workshops are similar to those offered by high schools and colleges as part of the educational curriculum. At the hearing before the Division, Dr. Robert W. Young, superintendent of schools, related that although the West Morris Regional School District maintained a dramatic arts program, no such program is offered in the adult education sector "[b]ecause there is a good center in Chester * * * for adults * * *.

[T]here is not a demand for this [area of study] because there is an active group [referring to the Chester Theatre Group] in the community * * *." The school system has also utilized the Chester Theatre for at least one school production.

Apart from offering children's programs locally, the Group maintains a traveling company which has performed before 4,000 children throughout the country. This company rehearses in the Chester Theatre.

The Division concluded that the organization does not meet the statutory requirements for exemption that it be "actually and expressly used for the moral and ...


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