Morristown Medical Center Not Property Tax Exempt, Court Rules

Despite being labeled a non-profit organization, Morristown Medical Center was not tax exempt during a period of three years as the town it resides in claims, according to a court ruling handed down last week.

The town of Morristown filed suit against the Atlantic Health Systems-owned hospital on Madison Avenue, claiming the medical center should not be exempt from paying property taxes because it is listed as a non-profit business.

Last week’s ruling came for the years 2006, 2007, and 2008, and cited the hospital performing as a “legal fiction,” defined by the court as, “The assumption that a certain thing is true, and which gives to a person or thing, a quality which is not natural to it, and establishes, consequently, a certain disposition, which without the fiction, would be repugnant to reason and to truth.”

Under the ruling, only the hospital’s auditorium, fitness center, and visitors’ garage would remain exempt from the payment of property taxes.

Sanctioned by state law, hospitals in New Jersey are tax exempt because they are considered non-profit.

The ruling, however, said if the other hospitals in the state are functioning under the same guise, then, “it is a function of the Legislature and not the courts to promulgate what the terms and conditions will be.”

Did the court make the right decision? Should hospitals be considered non profit or profit businesses?