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Volume 3 - Opinions of Counsel SBEA No. 73

Opinions of Counsel index

Nonprofit organizations exemption (hospital) (water charges) - Real Property Tax Law, § 421:

Contractual charges to a hospital made by a city for water supplied and metered are charges for use and not a tax. While a hospital is exempt from taxation, it is not exempt from a contractual water charge.

Our opinion has been requested as to the legality of the water charge which a city has determined should be exacted from a hospital because of the extraordinary quantity of water which the hospital uses.

A section of the city charter authorizes the city in question to establish general city-wide water rents. In addition, the charter authorizes the city to establish special rates for “. . . buildings, establishments and trades which consume large quantities of water.” The city’s local law providing for the installation of water meters in establishments which consume extraordinary amounts of water would appear to be a valid act within the limits established by the charter.

It is our opinion that charges to a hospital made by the city for water supplied and metered pursuant to a city law are contractual charges for use and clearly not a tax. And while a hospital is exempt from taxation (N.Y. Const. Art. XVI, § 1; Real Property Tax Law, § 421), it is not exempt from a contractual water charge.

February 20, 1973

Updated: