TRENTON – The Senate Budget and Appropriations Committee today approved legislation sponsored by Senate Shirley K. Turner that would require all historic sites granted property tax exemptions after 1999, including Princeton’s Cottage Club, to follow current requirements in order to keep that exemption.
“When we passed the reforms to the tax exemption in 2004, we didn’t want to place an additional burden on those sites that had been legitimately serving their communities for years. At the same time, those new requirements were meant to go into effect moving forward so that no one else could abuse the exemption and get a free ride,” said Senator Turner.
In 2004, the Legislature approved a measure that would require historic site seeking a property tax exemption to be open to the public for at least 96 days each year. The previous requirement was that the site be open 12 days each year. The bill did not require any site previously granted an exemption to follow the new guidelines.
“Unfortunately, the State Supreme Court read the law differently than we had intended and found that the Cottage Club could sneak in under the old standard because they had their application in before the 2004 law was passed,” explained Senator Turner.
The Senator’s bill, S-2808, would clarify the intention of the original bill from 2004 and make sure that unless the site had received their exemption before 1999, they must comply with the 2004 standards. The change applies to applications that were pending or denied and on appeal because those properties were not already relying on the tax exemption.
Senator Turner noted that Princeton Borough now looks to lose $60,000 a year because of the Cottage Club exemption, on top of $320,000 they would be required to refund the club on taxes paid over the last few years.
“Any time we grant an new exemption, we further the burden placed upon the other property tax payers of that community and it is critical that those sites provided a property tax exemption as a historic site give back a considerable amount to their community,” said Senator Turner.
Senator Turner added, “The historic site tax exemption is meant to help small non-profits keep these sites well maintained, not provide a financial break to groups looking to shirk their responsibility to the community.”
The bill now goes to the full Senate for their approval.