Earlier this week, the NJ Supreme Court released its opinion in Gourmet Dining LLC v. Union Twp., a case examining whether or not a restaurant operating on a State university campus qualifies for a property tax exemption. More precisely, the issue before the Court was whether a gourmet restaurant operating on the campus of a public college continued the public purpose of that college, therefor entitling it to an exemption from property taxes.
The Supreme Court reversed the Appellate Court’s decision finding that the arrangement the restaurant had with the state university is taxable as a lease or lease-like interest. Further finding that the public-benefit-oriented exemption provisions in issue were not intended to exempt the for-profit operator of a high-end, regionally renowned restaurant situated on tax-exempt property, when the overriding purpose of the commercial endeavor is focused on profitmaking. For these reasons, the Court found in favor of the municipality, ruling that the restaurant must bear its fair share of the local property tax burden.
You should review this decision carefully with your municipal attorney and tax assessor for more information on the potential impact on your community.
Contact: Frank Marshall, Esq., Associate General Counsel, firstname.lastname@example.org, 609-695-3481 x137.