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Volume 3 - Opinions of Counsel SBEA No. 37

Opinions of Counsel index

Nonprofit organizations exemption (educational) (nursery school) - Real Property Tax Law, § 421:

A nursery school properly registered with the Commissioner of Education or chartered by the Board of Regents is an educational institution under section 421 and entitled to exemption from real property taxation.

          Our opinion has been requested as to the taxable status of a school building belonging to a nonprofit private nursery school.

The nursery school in question was granted a “Provisional Charter” by the New York State Board of Regents. This Charter stated that the purpose of the corporation was: “To establish, conduct, operate and maintain a nonprofit private nursery school and registered kindergarten.” The Charter also contains the recitations regarding its nonprofit character usually found in nonprofit charters.

However, paragraph 7 states as follows:

7. This provisional charter will be made absolute if, within 3 years, the corporation shall acquire resources and equipment available for its use and support and sufficient and suitable for its chartered purposes in the judgment of the Regents of the University and be maintaining an institution of educational usefulness and character satisfactory to them. Prior to the expiration of said 3-year period an application for the renewal of this provisional charter or for an absolute charter will be entertained by the Regents but, in the event that such application is not made, then at the expiration of said term of 3 years this provisional charter shall terminate and become void and shall be surrendered to the Regents.

The school has acquired a building for which it now seeks exemption.

The first and most crucial question is whether the operation of a nursery and kindergarten is an educational purpose under section 421 of the Real Property Tax Law (formerly § 420).

At least one appellate court has held that a nonprofit, education corporation chartered by the New York State Board of Regents to conduct a nursery school for children between the ages of two and five years was an educational institution under section 421 of the Real Property Tax Law (Croton Community Nursery School v. Coulter, 283 App. Div. 716, 127 N.Y.S.2d 416). In this case the court pointed out that nursery schools are recognized as educational institutions under section 1712 of the Education Law.

In the past few years this office has rendered several opinions which follow this court opinion. Our reasoning was that, “education” can commence in the formal sense in schools for children below the age of six.

However, a recent case indicates that an organization which claims an educational exemption must be properly registered with the Commissioner of Education or chartered by the Board of Regents (Crusade for Christ, Inc. v. Town of New Lebanon, 36 App. Div.2d 247, 230 N.Y.S.2d 164). Thus, the organization should prove that it is still chartered by the Board of Regents in that it has fulfilled the conditions stipulated in the provisional charter to qualify for exemption under section 421.

February 9, 1973

Updated: