New Jersey Tax Court Alarms Nonprofits in the Morristown Memorial Hospital Case

In a detailed and closely-watched decision issued on June 25, 2015, Judge Vito Bianco, a New Jersey Tax Court judge sitting in Morristown, denied a property tax appeal of Morristown Memorial Hospital. This case, AHS Hospital Corp., d/b/a Morristown Memorial Hospital v. Town of Morristown, has received great attention in the press for good reason. By holding that a nonprofit hospital is not exempt from paying real estate taxes, the implication is that many hospitals could face this fate as well. For municipalities, this will be welcome news, but for hospitals – and, potentially, other nonprofits – this is a very unwelcome result.

This article, authored by Peter J. Ulrich, a Director in the Gibbons Corporate Department, and Bozena M. Diaz, an Associate in the Gibbons Corporate Department, was originally published as a Gibbons Corporate & Finance Alert, and can be viewed here.

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