By Nick Norlen, Staff Writer
The Cottage Club is up to date on its tax payments to Princeton Borough, but the Princeton University-affiliated private eating club is still pursuing avenues for a tax exemption on the basis of its historic status.
The club’s tax-exempt status has been the subject of a lengthy dispute with Princeton Borough, which has made efforts to officially and permanently return the club to the municipal tax rolls.
Listed on both the state and National Register of Historic Places, the Prospect Avenue club initially applied for an exemption in 2002 as a historic site and a nonprofit organization.
A Supreme Court decision affirming its tax-exempt status was quickly followed this summer by state legislation enacted to negate that decision and to hold the club to a 2004 state statute requiring tax-exempt historic sites to be open to the public for at least 96 days a year.
Traditionally, the club has only been open 12 days a year, according to its attorney, Thomas Olson.
Borough Councilman Andrew Koontz has said that the legislation essentially gives the Cottage Club two choices: to forego its tax-exempt status, or to comply with the 96-day requirement, which he said he believes would be difficult for the institution.
During the dispute, the club has continued to pay approximately $60,000 in taxes a year — 25 percent of which goes to the borough — and is paid up through 2007.
But the issue isn’t settled.
Mr. Olson said that the club’s position is that the Supreme Court decision — upholding its tax-exempt status — still applies, despite the new legislation.
And an appeal by the club to the tax court is still pending, with the club taking the position that the legislation can’t be retroactive, Mr. Olson said.
”The taxes are still being billed and being paid until the appeal is finalized,” he said. “If the appeal should come out in favor of the club, then the money would be refunded.”
However, Borough Attorney Michael Herbert said the legislation should protect the borough going forward and if the club continues to seek $326,000 in back taxes.
”The position of the borough is that the legislation has made clear that the Cottage Club is not exempt,” he said.
Mr. Herbert said the borough feels it has a strong position, noting that there is “no formal application in the Supreme Court or in the appellate courts to the state that the legislation does not have any application to the Cottage Club.”
But Mr. Olson said that the Supreme Court has remanded the case back to the Department of Environmental Protection, which denied the initial request for a tax-exempt status before the court reversed that decision.
Mr. Olson said he and his client are waiting for action on that front.
Meanwhile, the club has scheduled nine historical tour dates for 2008, including Jan. 9 and 30, March 19 and 26, May 27 and 28, and June 11, 18 and 19 — all on a “first come, tour basis”, according to its Web site.
Times are 10 a.m., 11 a.m., noon, 1:15 p.m. and 2 p.m.
