dissenting.
Property tax cases are not notorious for their emotional appeal. This one is not much different in that regard, although we acknowledge a certain seductive allure to the claim of tax-exempt status by Paper Mill Playhouse — a veritable oasis in an otherwise vast expanse of but modest thespian attainments. Trouble is, the tab has to be picked up by the rest of Millburn’s property owners. In this instance, that is both unfair and contrary to the legislative scheme.
As a general rule our statutes seek to impose the public burden of taxation on real property in just and equal share. Princeton Univ. Press v. Princeton, 35 N.J. 209, 214 (1961). Because statutes granting exemption from taxation represent a departure from this rule, they are construed “most strongly” against those claiming an exemption. Id. The burden is on the taxpayer to prove that his property falls within the statutory exempt enclave. Jamouneau v. Division of Tax Appeals, 2 N.J. *525325, 330 (1949). Adherence to these bed-rock principles compels a denial of Paper Mill’s claim to an exemption.
That part of the statute, N.J.S.A. 54:4-3.6, relied on by Paper Mill for an exemption sets forth three criteria: (1) the association must be organized exclusively for the moral and mental improvement of men, women, and children; (2) its property must be actually and exclusively used for a tax-exempt purpose; and (3) the association using the building must not operate for a profit and the building and land on which it stands must not be used for a profit-making operation. The second of these requirements is at the heart of this dispute — actual and exclusive use of Paper Mill’s property for the moral and mental improvement of the populace.
The Township’s argument, with which we agree, essentially is that Paper Mill is a professional theatre whose major productions represent a commercial endeavor. To the extent that the production phase of its operations takes on the nature of and is a profit-making commercial enterprise, Paper Mill’s use of its property is not exclusively for a tax-exempt purpose. It was Paper Mill’s burden to establish this exclusivity requirement — a burden that it did not choose to assume until 1978, when for the first time in over forty years it sought an exempt status. This “exclusivity” requirement, a specific of the statute, was put into sharp focus by this Court in Pingry Corp. v. Hillside Township, 46 N.J. 457, 462-63 (1966).
Pingry is important for its tracing of the legislative history of the exemption statute’s “colleges and schools” clause; of the original “actually and exclusively used” language, Act of April 8, 1903, ch. 208, 1903 N.J.Laws 394; and of the later deletion of “exclusivity,” Act of April 8, 1913, ch. 278, 1913 N.J.Laws 570. Its particular significance lies, of course, in its graphic demonstration of the Legislature’s understanding of how to broaden the exemption when it wished to by removing any requirement that the property be used exclusively for an exempt purpose — a step it took for colleges and schools but has resolutely refrained *526from taking in respect of organizations and associations organized exclusively for the mental and moral improvement of society. Pingry’s meticulous underscoring of the difference in language between the “colleges and schools” exemption (no “exclusivity” requirement) and the one before us further reveals the irrelevancy of the Court’s reliance on school cases. Ante at 521-22 (citing The Kimberly School v. Montclair, 2 N.J. 28 (1949), and City of Trenton v. New Jersey Div. of Tax Appeals, 65 N.J.Super. 1 (App.Div.1960)).
Even more significant in Pingry, which involved the tax-exempt status of seven faculty houses owned by the school, was this Court's analysis of whether those properties were actually used for school purposes. The Court posited the following proposition:
Where the institution by its rental agreements with its faculty members assumes the role of an ordinary landlord and profits, the purpose to which the buildings are put can be said to only indirectly further the goals of school and thus the finding of “actual use” cannot be found. However, where, as here, the landlord-tenant relationship is secondary to the primary purpose of providing the housing for the faculty on the campus site and no profit is possible, an exemption can be justified. [46 N.J. at 463 (emphasis added).]
A second significant decision is Princeton Univ. Press v. Princeton, supra, 35 N.J. 209, which emphasized the importance of the nonexistence of a profit when, in order to qualify for exempt status, the property had to be exclusively used for the beneficial purpose of “moral and mental improvement of men, women and children,” the same exemption provision as is before us. The statute’s “exclusivity” requirement failed of satisfaction because in addition to publishing outstanding scholarly works, Princeton Press did commercial printing work in order to offset the losses it incurred through its purely scholarly pursuits. Id. at 216. That work was undertaken for the purpose of making a profit. “Hence, in this sense the printing [took] on the nature of a commercial enterprise and, therefore, it cannot be said that the property is exclusively used for the statutory purpose.” Id. (emphasis in original). That the profit was used to support publication of scholarly books did not alter the *527requirement that the property had to be used exclusively for the highly esteemed purposes in its charter.
These cases demonstrate that the taxpayer must prove both (1) that the purpose of the organization qualifies and (2) that in carrying out that purpose, the organization does not use the exempted property for profit making.
Although the commercial nature of Paper Mill’s activity may not stand out so starkly as the commerciality in Princeton Univ. Press, it is nevertheless unmistakably present. Some of its more important features are that Paper Mill retains a full-time salaried staff, including a producer, manager, ushers and other maintenance workers, and has all the trappings of a full-fledged commercial theatre, such as a press agent, union set designers, hairdressers, stage hands and musicians, and a permanent casting office in New York City. We would not presume to quarrel with the character of its productions, and are prepared to concede for today’s purposes that an appearance of Bert Parks or the enormously talented Victor Borge does not of necessity mean that the theatregoer would be deprived of moral and mental improvement; but the list of productions for the 1977 season (that preceding the tax year in question), ante at 509, strongly suggests that Paper Mill’s management had one eye fixed at least as firmly on filling the house as the other was fixed on uplifting the cultural level of the community.
Equally persuasive to us are the numbers: average income of more than $44,000 for the fiscal years (June 30) 1974 to 1979; $275,000 in earnings for fiscal 1978; earned surplus at the close of fiscal 1977 of $324,000; and earned surplus at the end of fiscal 1978 of $600,000. Its box office receipts from theatrical operations in fiscal 1978 were $1,795,0001 These figures indicate at best that the property for which the tax exemption is claimed is being used only indirectly, and not exclusively, for the moral and mental improvement of men, women, and children.
*528The record amply demonstrates that the major theatrical productions command most of the taxpayer’s attention; that these are usually limited to already proved commercial entertainment; that Paper Mill makes every effort to hire the highest quality theatrical performers and, consequently, often hires professional stars. These celebrities, in turn, are attracted to the taxpayer’s operations, for it has a forty-two-year reputation for superior productions. The major offerings, as the Appellate Division observed, are primarily shows that have enjoyed success on the New York and London stages. These performances have generated a substantial profit for the theater. Moreover, some of the productions are travelling shows, produced elsewhere and booked in to the Paper Mill Playhouse. No one denies that much of this entertainment is staged with the anticipation of producing, and in truth does produce, a profit. Compare this to Boys’ Club of Clifton, Inc. v. Township of Jefferson, 72 N.J. 389, 400 (1977), where profitable usage was de minimis.
The majority misconceives the nature of the exemption, seeking to distinguish Paper Mill from a commercial enterprise predicated on a series of factors that heretofore have never been dispositive of the issue of “exclusive” use of the structure in question. The Court starts with the predicate that “[n]o commercial enterprise whose essential purpose is to make money will follow Paper Mill’s policies”, ante at 514 and 523-24. Of course not. The majority relies on features of corporations organized for profit, such as the distribution of assets on dissolution, division of profits, and use of surplus. None of those factors exists in non-profit corporations. See, e.g., Princeton Univ. Press, supra, 35 N.J. 209. The pivotal question is, does the Paper Mill ever use the theatre to make a profit? 2
*529The Township offers a proposal for measurement of commerciality in the theatre context, based upon three factors: (1) what is produced — mainly popular shows that have enjoyed commercial success elsewhere, as distinguished from, say, a repertory company devoted to the classics or an avant-garde ensemble experimenting on new works; (2) how it is produced — sharing of net receipts with big-name stars, full-time paid staff, sophisticated productions, expensive advertising; and (3) with what results — large audiences, substantial revenues. These criteria strike us as reasonable and workable, but we need not for today’s purposes cast them in bronze. Certainly as applied to the facts before us they yield but one result: Paper Mill’s property is not used exclusively for tax-exempt purposes.
We would affirm.
For reversal — Chief Justice WILENTZ and Justices HANDLER, POLLOCK, O’HERN and GARIBALDI — 5.
For affirmance — Justices CLIFFORD and SCHREIBER — 2.
Real estate and other taxes during fiscal 1978 totalled $10,816.
Put differently, the pertinent inquiry is whether commerciality has infiltrated Paper Mill’s operations so as to destroy its claim of exclusivity of its tax-exempt activities. The majority implicitly accepts the proposition that tax-exempt status of a structure is not lost even though the non-profit *529organization intentionally uses the building to make a profit, so long as the profit-making venture arguably is for the mental and moral improvement of its patrons. We do not agree.
Moreover, the Court’s fundamental misunderstanding of the issue is compounded by the irrelevance of its reference to the fact that
Paper Mill is an exempt organization under Section 501(c)(3) of the Internal Revenue Code, exempt from the payment of social security taxes and entitled to a special charitable organization federal mail rate. In addition, since 1966 Paper Mill has qualified for a charitable exemption from the New Jersey Sales Tax. [Ante at 511-12.]
Federal income tax exemption standards have no relation to state law governing property tax exemption. See The Presbyterian Homes v. Division of Tax Appeals, 55 N.J. 275, 286 n. 3 (1970).