On appeal from the Tax Court of New Jersey, Docket No. 10915-2007.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges A. A. Rodriguez and Ashrafi.
Plaintiff Englishtown Synagogue, Inc., appeals from a January 25, 2010 order of the Tax Court granting summary judgment to defendant Township of West Orange and dismissing plaintiff's complaint. Plaintiff had sought exemption from payment of property taxes for the period October 2006 through December 2008. Plaintiff's property qualified for tax exemption under N.J.S.A. 54:4-3.6, but defendant West Orange had denied the exemption because plaintiff had not obtained zoning approval to use the property as a house of worship.
The Tax Court held that compliance with zoning laws is necessary before the property owner is relieved of paying property taxes. In reaching that conclusion, the Tax Court applied its prior decision in Society of the Holy Child Jesus v. City of Summit, 23 N.J. Tax 528 (Tax 2007), but another panel of this court reversed that decision after the time of the judgment in this case. Society of the Holy Child Jesus v. City of Summit, 418 N.J. Super. 365 (App. Div. 2011). Apparently as a result of that reversal, West Orange has not opposed plaintiff's appeal in this case. Our holding in Society of the Holy Child Jesus applies to the facts of this case. We reverse the judgment of the Tax Court and remand for entry of judgment in favor of plaintiff.
Briefly summarizing the facts, plaintiff was incorporated in 2005 as a religious organization. In May 2006, it purchased the subject property located at 37 Buckingham Road, West Orange. The property is in a residential zoning district and contained at the time of purchase a single-family house, part of which was being used as a rental residence. Plaintiff intended to use the property as a house of worship.
In addition to residential uses, the West Orange zoning ordinance permits in that district conditional use of property as a house of worship. The conditions include bulk and dimensional requirements for set-backs, buffering, landscaping, parking, and ingress and egress. Some of these conditions were not satisfied by the subject property so that it could immediately be used as a synagogue. In February 2007, West Orange zoning officials filed a citation against plaintiff for use of the property in violation of the zoning ordinance. After municipal court proceedings at which a fine was imposed, plaintiff temporarily ceased use of the property to conduct religious services. Plaintiff continued to use the property, however, to conduct meetings and to store religious artifacts.
Before the zoning citation was issued, in October 2006, plaintiff had applied for exemption from payment of property taxes for the portions of the property that were being used for religious purposes. In January 2007, West Orange denied the application pending zoning approval. Plaintiff applied for variances under N.J.S.A. 40:55D-70c for deviations from bulk and dimensional requirements and under N.J.S.A. 40:55D-70d(3) for conditional use of the property as a house of worship. Plaintiff's zoning application was approved in May 2008. In February and May 2009, temporary and final certificates of occupancy to operate a house of worship were granted. West Orange approved an exemption from payment of property taxes beginning January 1, 2009.
Plaintiff appealed the denial of tax exemption for the period from October 2006 through December 2008 to the Essex County Board of Taxation. When its appeal was denied, plaintiff filed its complaint in the Tax Court for the same relief. On cross-motions for summary judgment, the Tax Court decided the matter in favor of West Orange, holding that plaintiff was not entitled to tax exemption until it had complied with zoning regulations. We now reverse the Tax Court's decision because plaintiff's application met the requirements of the exemption statute.
N.J.S.A. 54:4-3.6 provides tax-exempt status to "all buildings actually used in the work of associations and corporations organized exclusively for religious purposes . . . ." To be entitled to tax exemption: (1) the owner of the property must be organized exclusively for religious purposes, (2) the property must be actually and exclusively used for the tax-exempt purpose, and (3) operation and use of the property must not be conducted for profit. See Int'l Schs. Servs. v. W. Windsor Twp., 207 N.J. 3, 15-16 (2011); Paper Mill Playhouse v. Millburn Twp., 95 N.J. 503, 506 (1984). West Orange never disputed that plaintiff could meet these criteria for the portions of the property that were not being rented as a residence, and plaintiff was not seeking tax exemption for the rented portion. Only the property's failure to satisfy zoning regulations disallowed tax exemption.
We addressed the issue of zoning violations in conjunction with tax exemption in Society of the Holy Child Jesus, supra, 418 N.J. Super. 365. We held that the statutory criteria for tax exemption for a religious organization do not include a requirement that the property comply with zoning requirements. Id. at 386. We distinguished cases that had concluded otherwise when determining qualification for reduced tax obligations under the Farmland Assessment Act, N.J.S.A. 54:4-23.1 to -23.23. Society of the Holy Child Jesus, supra, 418 N.J. Super. at 375-80 (discussing Cheyenne Corp. v. Twp. of Byram, 248 N.J. Super. 588 (App. Div. 1991), certif. denied, 137 N.J. 312 (1994); Clearview Estates, Inc. v. Bor. of Mountain Lakes, 188 N.J. Super. 99 (App. Div. 1982)). Cf. Byram Twp. v. Western World, Inc., 111 N.J. 222, 230-31 (1988) (municipality had the burden of proving the ineligibility of the property because of failure to satisfy requirements of Farmland Assessment Act). We also distinguished the functions of the taxing authority and the purposes of tax exemption laws from those of zoning officials and land use laws. Society of the Holy Child Jesus, supra, 418 N.J. Super. at 381-82.
Especially where the use of the property by plaintiff was not a prohibited use, see Coventry Square, Inc. v. Westwood Zoning Bd. of Adj., 138 N.J. 285, 293 (1994), and the deviations were only from bulk and dimensional zoning regulations, the tax exempt status of plaintiff's property should not have been determined by the zoning officer applying zoning regulations. Plaintiff was entitled to tax exemption for ...