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Volume 6 - Opinions of Counsel SBEA No. 17

Opinions of Counsel index

Nonprofit organizations exemption (miscellaneous) (Little League) - Real Property Tax Law, § 421:

Real property belonging to a Little League is not entitled to an exemption from real property taxation pursuant to section 421 (i.e., 420) of the Real Property Tax Law because a public benefit purpose is not the test of qualification for exemption. If an organization is not organized for an exempt purpose, the question of an exempt use is never reached.

An opinion of the State Board holds that real property belonging to a Little League is not entitled to an exemption from real property taxation pursuant to section 421 (i.e., § 420) of the Real Property Tax Law (4 Op.Counsel SBEA No. 90).  It has been suggested that several court cases conflict with this opinion.

In the first case, Matter of North Manursing Wildlife Sanctuary, Inc. v. City of Rye, 52 Misc.2d 96, 274 N.Y.S.2d 915, rev’d on other grounds, 28 A.D.2d 891, 282 N.Y.S.2d 18, the Supreme Court, Westchester County, held the applicant to be organized exclusively for one or more of the exempt purposes set forth in section 421 and therefore exempt from real property taxation. In the course of its opinion the court noted the following:

An organization which has as one of its purposes “to provide a feeding, breeding, nesting and refuge grounds for birds and fowl” and which has the further purpose to “educate and instruct the citizenry in the field of conservation” is devoted to human betterment and is therefore entitled to tax exempt status under section 420 of the Real Property Tax Law. [52 Misc.2d 96, 274 N.Y.S.2d at 917 (emphasis added)].

It seems clear that, at least in recent years, a finding that an organization was “devoted to human betterment” - an amorphous purpose at best - would not entitle such organization to an exemption under this statute. The basis for our statement is the Court of Appeals’ decision in Matter of Association of the Bar of the City of New York v. Lewisohn, 34 N.Y.2d 143, 313 N.E.2d 30, 356 N.Y.S.2d 555. There the Court cited the varied laudable activities of the Bar Association but pointed out that “public benefit is not the test of qualification for exemption” (id. at 154, 313 N.E.2d 30, 356 N.Y.S.2d at 562).

Subsequent recent cases reiterate the point that a purpose “generally beneficial” to the public does not qualify an organization for exemption under section 421. For example, in Matter of American Bible Society v. Lewisohn, 48 App.Div.2d 303, 369 N.Y.S.2d 725, aff’d, 40 N.Y.2d 78, 351 N.E.2d 697, 386 N.Y.S.2d 49, the Appellate Division noted as follows:

The activities of the petitioner, without doubt, confer a distinct benefit upon the public. However the question is not whether such activities are beneficial to society but simply whether they fall within the categories rendering it subject to taxation, and not within the categories which are tax exempt. [48 A.D.2d 308, 369 N.Y.S.2d at 730 (emphasis added)].

Therefore, cases suggesting that organizations devoted to generally good or beneficial purposes are entitled to exemption under section 421 have little or no relevance to current questions of exempt status.

The other cases cited relate to the question of the use to which property of a nonprofit organization was put (Pace College v. Boyland, 4 N.Y.2d 528, 151 N.E.2d 900, 176 N.Y.S.2d 356, and, People ex rel. Watchtower Bible and Tract Soc., Inc. v. Haring, 8 N.Y.2d 350, 170 N.E.2d 677, 207 N.Y.S.2d 673). Our opinion regarding Little League property, however, turned on the purpose for which the League was organized; we never reached the use question.

The assessor, under section 421, must first determine whether the applicant is “organized exclusively” for one or more of the exempt purposes set forth in the statute. If satisfied that this requirement has been met, he must then examine the use of the property to see that it conforms to the purposes set forth in the corporate charter.

Our opinion in regard to Little League property was devoted to the question of the purposes for which the association was organized and whether such purposes came within the narrow confines of section 421. The question of use and the question of organization are distinct. Cases considering the former are not necessarily applicable to the latter. In fact, it does not appear that the cases cited suggest any reason for reversing our previous opinion.

We do not believe that the purposes for which the Little League was organized fit so squarely within section 421 that its property is necessarily entitled to exemption thereunder. As in cases involving other property owners applying for exemption, where there is doubt the issue should be resolved in favor of taxation.

April 14, 1977

NOTE: The North Manursing case referred to above was reversed by the Court of Appeals, 48 N.Y.2d 135, 397 N.E.2d 693, 422 N.Y.S.2d 1, and remitted to the Appellate Division which granted the exemption 75 A.D.2d 855, 427 N.Y.S.2d 843.

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