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Morristown hospital loses property tax court case; judge says facility does not meet non-profit status


By Tim Darragh | NJ Advance Media for
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on June 26, 2015 at 7:50 PM

Morristown Medical Center should pay property taxes on virtually all of its 40-acre property in town, a tax court judge ruled Friday in a decision closely watched by other hospitals across New Jersey.

Tax Court Judge Vito Bianco ruled that the hospital failed to meet the legal test that it operated as a non-profit, charitable organization for the tax years 2006 through 2008. Only the auditorium, fitness center and the visitors’ garage should not be assessed for property taxes, he said.

The decision, the hospital’s attorneys have said previously, could cost it $2.5 million to $3 million a year. The ruling applies only to the medical center’s property taxes, not to its federal tax status as a non-profit.

Other non-profits in New Jersey, especially hospitals and universities, have been concerned about the case, fearing that a ruling for the town – which also is in court for property taxes from the hospital for 2009 through 2015 — could encourage host municipalities to challenge their property tax exemptions as well.