Background
Heritage Christian Services, Inc. is a not-for-profit organization that provides residential, day-program, and community-support services for individuals with intellectual and developmental disabilities. It owns real property in the Town of Webster, Monroe County, and sought a real property tax exemption under Real Property Tax Law § 420-a — the statute that exempts from local taxation property owned by a charitable organization and used exclusively for its charitable purposes. Webster Central School District, whose tax levy is directly affected, contested the petition.
Heritage Christian commenced a hybrid CPLR Article 78 and RPTL Article 7 proceeding, challenging the denial of the exemption for tax years 2017 through 2023. On cross-motions for summary judgment, Supreme Court sided with Heritage Christian, directing the exemption for all seven contested tax years. The school district appealed.
The Court’s Holding
The Fourth Department unanimously affirmed. Under RPTL 420-a(1)(a), a property owner seeking a charitable exemption bears the initial burden of establishing exclusive use in furtherance of its exempt purpose. The court held that Heritage Christian carried that burden through the affidavit of its CEO, who drew on firsthand knowledge to detail the organization’s operations on the subject parcel. Relying on Matter of Merry-Go-Round Playhouse, Inc. v Assessor of City of Auburn (24 NY3d 362, 367-368 [2014]), the court confirmed that a qualifying affidavit based on personal knowledge has genuine probative weight.
Once Heritage Christian made its prima facie showing, the burden shifted to the school district to raise a triable issue of fact. The court concluded the school district failed to do so — offering no competing evidence tending to show that any portion of the property was devoted to non-charitable purposes.
Key Takeaways
- Under RPTL 420-a, a not-for-profit’s CEO affidavit grounded in firsthand operational knowledge is sufficient to establish a prima facie case for the charitable tax exemption.
- The “exclusive use” standard requires that the property be dedicated to and used in furtherance of the organization’s charitable mission, with no significant diversion to private or commercial benefit.
- Bare skepticism without evidentiary support will not defeat a well-supported summary-judgment motion for tax exemption.
Why It Matters
This decision reinforces the summary-judgment framework that New York courts apply in RPTL 420-a disputes. For not-for-profit property owners — whether disability-services providers, hospitals, or social-service agencies — it confirms that a detailed, knowledge-based executive affidavit can carry the prima facie burden without a full evidentiary hearing. Taxing jurisdictions and objecting school districts must marshal affirmative proof of non-exempt use to survive a cross-motion for summary judgment.
The seven-year retroactive exemption also has practical significance: assessors and school districts that routinely challenge exemption renewals should audit whether they can actually produce evidence of non-charitable activity before investing in litigation.