Volume 4 - Opinions of Counsel SBEA No. 26
Nonprofit organizations exemption (ball park) (ownership by private person) - Real Property Tax Law, § 421:
In order to receive an exemption pursuant to section 421 of the Real Property Tax Law, the real property must be owned by a corporation or association. If property is owned by a private person, no exemption may be granted pursuant to this section even if the property is used for exempt purposes.
We have received an inquiry concerning the taxable status of a tract of land, apparently being used strictly as a ball park for young people. At the death of the original owner of the land, the property was left to his son with the stipulation that the land be leased to the Pony League for a ten year period at a price of one dollar per year, and this lease is to be renewable every ten years. Some twenty-odd acres are in a swamp area and cannot be used; the remainder of the property is used exclusively for baseball diamonds. There is no charge for the boys and girls participating in these leagues, but there is a voluntary collection taken up at the games from among the families present. We are asked whether this property may be exempt from taxation under the provisions of section 421 of the Real Property Tax Law.
Section 421 (i.e., § 420) of the Real Property Tax Law authorizes an exemption from real property taxation on real property owned by certain nonprofit organizations. The requirements of that section can be summarized as follows:
1. The real property must be owned by a corporation or association organized exclusively for one or more of the purposes listed in section 421.
2. The real property must be used exclusively for carrying out one or more of the purposes listed in section 421. Any portion of the property which is not so used is subject to taxation.
3. No officer, member or employee of the organization may be entitled to receive any pecuniary profit from its operations, except reasonable compensation for services performed in furtherance of the corporate purposes.
4. No exemption shall be granted if the organization is a guise or pretense for directly or indirectly making any other pecuniary profit for such organization or for any of its members or employees.
It is apparent that the first requirement of section 421 is not satisfied since the real property in question is owned by a nonexempt private person rather than by a nonprofit association organized exclusively for one or more of the purposes listed in that section.
April 9, 1974
