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Volume 2 - Opinions of Counsel SBEA No. 46

Opinions of Counsel index

Nonprofit organizations exemption (religious) (drug rehabilitation center) - Real Property Tax Law, § 421(1):

Real property of a nonprofit religious corporation which is used exclusively in the operation of a nonprofit drug rehabilitation center satisfies one or more of the purposes of section 421 and an exemption should therefore be granted.

          We have received an inquiry concerning the taxable status of real property owned by a nonprofit religious corporation which is used for rehabilitation of drug addicts.

The facts are such that the organization has been involved primarily in activities relating to drug addiction control and rehabilitation. A nonprofit organization organized exclusively for one or more of the purposes of section 421 may be exempt if it carries out activities consistent with any of the purposes of the statute. It is our opinion that the operation of a nonprofit drug rehabilitation center is a hospital, charitable, or benevolent use depending upon the particular circumstances of its operation.

          A nonprofit professionally organized and staffed institution which systematically cares for sick and injured people has been held to be exempt both as a hospital and as a charitable and benevolent organization. Such classifications do not necessarily require that treatment be offered free of charge (People ex rel. Doctors Hospital, Inc., v. Sexton, 267 App. Div. 736, 48 N.Y.S.2d 201, aff’d 295 N.Y. 553, 64 N.E.2d 273; Stony Wold Sanitorium v. Keese, 112 App. Div. 738, 98 N.Y.S. 1088).

An organization operating a drug rehabilitation center may also be classified as “charitable” if it accepts any addict, irrespective of his ability to pay. Such organization, would, in our opinion, be operating for the care, custody and treatment of ill people, and the furnishing of such care is of the highest public purpose and should be classified as a charitable activity (Associated YM-YWHA’s of Greater New York, Inc., v. D’Angelo, 38 Misc.2d 1082, 239 N.Y.S.2d 722; Jewish Mental Health Society v. Village of Hastings-on-Hudson, 255 App. Div. 77, 5 N.Y.S.2d 567, aff’d 279 N.Y. 764, 18 N.E.2d 857; People ex rel. Untermyer v. McGregor, 295 N.Y. 237, 66 N.E.2d 292).

          Finally, a drug rehabilitation center can be classified as benevolent in that it is offering its facilities to people in need of assistance who would likely continue unaided were it not for the activities of the organization in question. In discussing the correctness of interpreting benevolent to include such activities which are of benefit to the general public, one court has held that “judges cannot close their eyes to conditions which every member of the community must know exists, nor to considerations which appeal to every right thinking citizen.” (Webster Apartments v. City of New York, 118 Misc. 91, 193 N.Y.S. 650, aff’d 206 App. Div. 749, 200 N.Y.S. 956). Additional case law supporting this principle includes the following: National Navy Club of New York, Inc., v. City of New York, 122 Misc. 89, 203 N.Y.S. 114; Corporation of Yaddo v. City of Saratoga Springs, 216 App. Div. 1, 214 N.Y.S. 523; People ex rel. Corporation of Yaddo v. Freeman, 259 N.Y. 620, 182 N.E. 207; People ex rel. Alumnae Ass’n. Mt. Sinai Hospital School of Nursing v. Rizzardi, 273 App. Div. 1024, 79 N.Y.S.2d 245.

          Therefore, if it is found that the organization satisfies the requirements of section 421 in regard to the actual us of its property (as discussed above) and as to the nonprofit aspects of the organization, then, in our opinion, the exemption should be granted.

December 20, 1971

Updated: